Is Primerica A Pyramid Scheme? | A Very Balanced Primerica Review

Today we are going to answer the question: Is Primerica a pyramid scheme?

Since you’re reading this, you were probably approached by somebody about starting your very own home based business. 

A business with unlimited earning potential, time freedom, and an opportunity for you to fire your boss.

Sound familiar?

The truth is, most of the people who recruit for these types of businesses really don’t do a very good job of selling it.

They make it sound too good to be true. 

Too much hype.

So maybe you’re intrigued, but you figured that you should probably do some research before just blindly jumping into something crazy like this.

But is it actually that crazy?

Is Primerica a legit company, or is it just another insurance pyramid scheme?

Most of the Primerica reviews out there really don’t approach this opportunity in a balanced way.

Some of them insist that it’s a complete Ponzi scheme, and others rave about how amazing it is and claim that any negative stories about the Primerica business are complete lies.

Look, the truth is somewhere in the middle.

Just like with most other things in life, the truth is nuanced and it’s important to outline the good and the bad if you want to make an informed decision.

If you decide to take the leap and become a Primerica life insurance agent, it’ll be a big commitment.

Not a decision you should make lightly.

And you should have all the available information.

So hopefully this Primerica review will answer all your questions and let you move forward with conviction and confidence, no matter what you decide.

By the way, if there’s something in this article that I missed and you have more questions that you would like answered, you could always leave a comment after reading!

What Is Primerica? | The History

Primerica got its start in 1981.

They provide insurance products, investment, and other financial services to folks in North America. 

They put a heavy focus on serving middle class families in the United States and Canada.

The Primerica business model is based on network marketing, also called multi level marketing.

There are many misconceptions about network marketing as a whole and commonly leads to people thinking that Primerica is a pyramid scheme.

We will address this concern later when we talk about the Primerica pay structure.

Is Primerica Listed On The BBB?

Primerica is listed on the Better Business Bureau, but I don’t believe that you should necessarily put a whole lot of weight on the reviews left there.

I found that all of the Primerica reviews left on the business profile page were either 5 star or 1 star reviews.

In other words, the people that write reviews for Primerica are lacking a nuanced perspective.

This is probably because when it comes to our money, we get very emotional.

So if you had a great experience, you want to shout it from the rooftops.

But if something went wrong, anything at all, we (as humans) tend to become hyper-emotional and any reviews we give will be reflective of that.

But that’s why you’re reading this, right?

To get a realistic, nuanced perspective on the Primerica business opportunity.

About Primerica

The main products that Primerica is known for are insurance products, including life insurance, home insurance, and auto insurance. 

They are also well known for selling retirement products such as mutual funds.

Over 100,000 people across North America are selling Primerica life insurance products, earning an average of just over $5,100 per year.

That doesn’t sound like a lot of money…

And it really isn’t.

The truth is, there are a few people earning hundreds of thousands while the vast majority earns next to nothing.

When Was Primerica Founded?

First, a common question asked is: Who started Primerica? 

Well, Primerica is traded publicly on the NYSE, so no one person owns Primerica outright.

The business has been through a roller coaster of mergers and acquisitions. 

The company that would eventually become Primerica was First American National Corporation, established in 1981.

In 1993, Primerica acquired Traveler’s Group which included multiple financial businesses including an asset management division of Morgan Stanley.

Traveler’s Group and Citicorp merged in 1998, creating the investment bank we know today as Citigroup.

This merger resulted in Primerica being owned by Citigroup. In 2008, Citigroup attempted to sell Primerica but the sale was canceled for unknown reasons.

In 2010, Primerica became a publicly traded company and began trading on the NYSE.

The following year, Citigroup sold all of its Primerica shares and ceased to have any involvement in the business.

Where Is Primerica Headquarters?

Primerica is located in Deluth, Georgia.

However, there are offices set up by independent reps all over North America.

Primerica Products

Primerica sells a variety of insurance and financial products. They’ve recently started selling home security products in addition to home and auto insurance. 

But they are best known for their term life Insurance products. 

Primerica Term Life Insurance

The best thing about Primerica is that they sell products that actually work.

If you have a term life insurance policy through Primerica, your beneficiary will get paid, period.

Full stop.

Many other network marketing companies sell products that cannot really be objectively proven to work, like It Works! for example.

There are 2 main types of life insurance policies out there, Term Life Insurance and Whole Life Insurance.

Term Life Insurance is the only type of policy that Primerica offers. 

This is a really good sign since the alternative is way overpriced (by up to 20x). As Dave Ramsey likes to say:

“Whole life insurance is the payday lender of the middle class”.

This is a very complicated subject to explain since the financial system is filled with jargon that makes it very difficult for the average Joe or Jane to understand.

This is done intentionally, so that average people will actually buy terrible products like whole life insurance.

Watch the video below where Dave Ramsey explains the difference between Term and Whole Life insurance.

Mutual Fund Investments

Primerica also sells a variety of mutual funds and investment plans. 

These products are OK.

But personally, I don’t think that mutual funds are a great way to invest your money. 

There are many hidden fees that accumulate and compound over time, which can potentially cost you hundreds of thousands of dollars over the long term.

Again, this is a difficult concept to explain because of all the complicated financial jargon and contracts that are 30 or more pages long.

The video below features Tony Robbins on CNBC where he explains the problems with fees associated with mutual funds.

A good alternative to mutual funds are simple Index Funds or ETFs.

If you want to learn more about this subject, I would recommend Tony Robbins’ latest book Unshakeable, which you can buy on Amazon or Audible.

Primerica Lawsuit

Primerica has faced several lawsuits over the last decade, but this really isn’t that uncommon for a network marketing company.

Or a financial services company…

Or really any large corporation in general.

But network marketing in particular seems to have a large target on its back due to the pyramid scheme misconceptions about the business model (which we will discuss later).

For example, Herbalife was sued by the United States government in 2016. This was probably the most publicised lawsuit in network marketing history.

But what happened with Primerica’s lawsuits?

Can Primerica be trusted?

Surprisingly, Primerica has never been sued on pyramid scheme allegations.

But they did deal with multiple lawsuits in 2012 when some of the company’s representatives convinced Florida public workers to move their investment portfolios away from government bonds and into more risky assets.

Personally, I would never invest in a government bond.

At least not long term. Interest rates have been pegged at lower than inflation for many years, and I don’t see that changing any time soon. And the whole point of investing is to beat inflation, right?

And investing in government bonds in this day and age literally makes you lose money over time.

Anyway…

I digress.

At the end of the day, these Primerica reps were actually giving good financial advice.

Primerica eventually settled the lawsuit in 2014 for over $15 million.

I believe you really can trust Primerica.

They seem to provide pretty solid financial education that is accessible for all people…

Regardless of their current knowledge of the financial system.

While I wouldn’t personally put my money into a mutual fund, I would certainly consider buying Term Life Insurance through Primerica.

How Does Primerica Work?

North America is facing a crisis.

I’m not talking about a virus, culture wars, or anything having to do with military conflict…

I’m talking about the retirement crisis.

The average income of Americans aged 65 and older is only $38,000, and their average net worth is $170,000.

That includes their real estate.

This tells me that the vast majority of Americans who are at retirement age right now do not have any money saved up.

They simply can not retire.

At all.

The Primerica business opportunity offers a chance for young and older people alike to increase their income by starting their own home based business.

Not only that…

They also provide financial education that will teach people the reality of the retirement crisis we face.

And what to do about it.

Primerica will teach you financial literacy, including the power of compound interest. 

This is one of the most important financial concepts you could ever learn as somebody younger, who still has some time to prepare for retirement.

The most important thing you can do to save for retirement is…

Start early.

This really hit home for me when first I learned about compound interest.

You might be asking yourself, “I barely have enough money for groceries and rent, how am I supposed to put any money away for retirement?”

The Primerica MLM As An Opportunity

As inflation continues to grind away at the purchasing power of your money, the statistics show that wages are not rising fast enough to compensate for that.

Many people are getting frustrated and angry at the system, which is part of the reason we are seeing so much anger in our society. 

But being angry doesn’t change your situation.

And there is nobody else who will improve your situation either, regardless of what any politician may try to tell you.

The only person who can improve your life is YOU.

While getting a second job can be a good option, why not build something yourself?

I personally think everyone should have a side hustle, but your side hustle should be something that you’re passionate about.

Something that you enjoy doing.

And it should be something that you can potentially turn into a full time career down the road.

So IF you enjoy finance and you enjoy helping people, the Primerica MLM could be a good option for you.

Let’s talk about how the business works.

How Primerica Works

As we discussed already, the Primerica business opportunity is based on network marketing.

So what exactly is network marketing?

Network marketing, or multi level marketing (MLM), is a business model that pays you on a 100% commission basis.

If you don’t make sales, you don’t get paid. 

This shouldn’t be that alarming…

Because network marketing is not a job.

It’s a business, meaning that you don’t get paid a wage… 

You get paid commissions.

Profits are infinitely better than wages – Jim Rohn

But the real power of network marketing comes in when you start building your own team of business reps.

Let’s say you know somebody who is interested in starting a side hustle and they join Primerica through you. 

You would now get paid commissions on the sales made by your team member…

In addition to any sales made by you personally.

When your team members start adding their own members…

You would also earn commissions on their sales, down to 11 levels deep.

This can get really powerful when you grow your organisation large enough that it starts growing itself.

Your monthly income could potentially rise without you putting in any effort.

Most Primerica business reviews don’t do a great job of describing network marketing. 

That’s because describing this business model is quite a task and really warrants its own article. That’s why I did a deep dive on What Is Network Marketing, which you can read here.

Primerica Compensation Plan

The Primerica pay structure is based on the Unilevel plan, which I described in more detail in this network marketing deep dive article.

But let’s talk about how Primerica pays you.

I have to be honest, it was quite difficult to find a detailed explanation of exactly how the Primerica compensation plan is structured.

I couldn’t find any neat charts or diagrams to share with you, but I’ll do my best to explain it.

How Do Primerica Reps Get Paid?

So in order to start getting paid good money with Primerica, you will need to get a license to sell financial products. This is simply due to government regulations.

This process will likely take you at least 3 months.

But there are several products that you can start selling right away, although they pay out lower commissions.

After you pass your exams and become an official Primerica representative, you can start earning the real cheddar.

If you sell an insurance plan, you would earn 25% of the premium. 

So if a customer signs up for a 25 year Term Life plan and the premium costs $1000, you would get paid $250.

That’s decent.

For investments or debt consolidation loans, the commissions are much smaller. 

If someone invests $1000, you would earn 30% of the dealer fee which is roughly 4% in your pocket.

30% of $40 is a small commission of $12.

Keep in mind that many people who take retirement seriously might invest hundreds of thousands of dollars over their lifetime…

So this could actually add up to a lot over time.

But in order to really make life changing money with the Primerica business model…

You need to start recruiting.

Building your own team of Primerica reps.

Building your downline.

Once you recruit 3 reps into your downline, you would qualify as a Senior Representative. You would start receiving 35% commissions on your sales instead of 25%.

This doesn’t sound like much…

But you would also start receiving commissions from sales made by members of your downline.

This is called an Override, and you would receive a 10% commission of every sale made by people in your downline.

As you grow your business, make more sales, and recruit more reps, you would start qualifying for higher levels in the pay structure.

The next tier is called District Leader, and this qualifies you to earn 50% commissions on personal sales and 15-25% Overrides on sales made by your downline.

The chart below outlines the commissions for each rank you hit in the Primerica pay structure.

The network marketing business model truly does appear pyramid shaped, so it’s understandable that many people ask themselves the following question:

Is Primerica A Legitimate Company?

Yes.

I believe it is.

Not everything about this business is good, and we’ll get to that.

But Primerica is a company that has operated now for over 40 years.

It’s publicly listed on the NYSE, and is basically a household name in certain parts of the United States.

And the truth is, network marketing companies as well as financial companies are very closely watched by government regulators.

They would not have stood the test of time if they weren’t a legitimate company, selling products that offered real value to people’s lives.

Feel free to check out the income disclosure on Primerica’s official website here.

So let’s talk about these Primerica scam allegations.

Is Primerica A Pyramid Scheme?

As we briefly mentioned already, there are many misconceptions about network marketing, multi level marketing, or MLM.

In a pyramid scheme, you would be paying for a spot in a pyramid shaped organisation. There are no real products sold in this type of scheme.

No value is being provided to an end consumer.

You simply pay for a spot in the pyramid scheme.

The higher up you happen to be positioned in the pyramid, the more money you make.

The person at the top gets rich, while the people at the bottom are just paying the people at the top.

But in a network marketing company like Primerica, there are real valuable products being sold that people will buy regardless of the potential business opportunity that the company offers. 

This is the most important distinction.

Network marketing is not really that different from any other type of traditional business model.

Consumers exchange their money for products that they need or want.

It’s just a value for value exchange.

The difference is the method by which the products are distributed into the real economy.

So what’s the benefit of network marketing versus the traditional corporate structure?

In network marketing, the company can save a lot of money because they don’t need to pay for advertising campaigns or other retail fees.

Instead, they can hire independent reps, allowing the regular Joe or Jane an opportunity to build a business that can become wildly profitable.

If the necessary effort is put into it.

In fact, I believe network marketing is inherently more fair than the traditional corporate business model.

Have a look at the image below…

That’s what the traditional corporate business looks like. 

Looks suspiciously like a pyramid scheme or Ponzi scheme, doesn’t it?

Look, it’s impossible to create any type of organisation and not have it look like a pyramid. You see it in education, politics, even in groups of good friends.

Humans will always organise themselves into hierarchies.

It can not be avoided.

Another Reason For Primerica Scam Allegations

One thing that I personally hate about network marketing is the cult-like atmosphere that all of these companies have.

I’ve been in several network marketing businesses in my lifetime, and they all seem to have this type of atmosphere.

I guess the company reps are just so excited about their new opportunity that they fail to notice any nuance in what they’re offering.

No company or organisation is perfect and when overzealous reps try to convince everyone that what they have is flawless, red flags go off in people’s minds.

Our BS detectors have become quite strong in today’s technological age…

So if you tell me that what you have is life changing, I WILL be sceptical until proven otherwise.

Most people will just dismiss an overzealous network marketer as brainwashed and move on, assuming that they got suckered into a pyramid scheme or Ponzi scheme.

This is why it’s very important for you as a network marketer to approach your business in a balanced, rational way.

If you don’t, you will be dismissed and people will make the assumption that Primerica is a cult or scam.

We will talk a bit more about how to be successful in the Primerica business shortly.

My Personal Primerica Experience

Many years ago, my ex-girlfriend got involved with Primerica.

She found a “job offering” in the classifieds section of our local paper, applied for the job and was “hired” immediately.

She quit the job she had, moved an hour away to be closer to her fellow Primerica reps, and started her training to get certified.

I remember finding it strange how she raved about this amazing new company she was working for.

And the weirdest part was how she was trying to sell me life insurance…

Even though I already had a life insurance policy and was contributing to a retirement plan every month.

She was very pushy about it too.

Something just felt off.

Then she convinced me to lend her my credit card because she maxed hers out…

Since she had quit her job and didn’t actually have an income.

Her new venture put a lot of strain on our relationship.

In fact, it’s what eventually ended our relationship.

Oh and by the way, she maxed my credit card out too, and her older sister had to pay me back after we broke up.

Now I don’t believe this is necessarily a reflection on Primerica as a business.

She just happened to get recruited into a downline that was teaching her to be pushy, irrational, and unprofessional.

I heard she quit the business shortly after we broke up.

If you’re building a network marketing business or thinking about joining one, I would recommend that you do your best to maintain a work-life balance.

If your business is going to put intense strain on your personal life, then is it really worth it?

Money is really important, but what good is money if you have nobody to share it with?

Primerica | How To Make Money

So let’s talk about how to make money in the Primerica network marketing business.

When you’re in the process of being recruited, chances are that you will be given unrealistic expectations about your future in Primerica.

If you are told:

• it will be super easy
• that you could retire from your day job within a year 
• or any other radical promise

Just be very sceptical.

You should start your business with realistic expectations. 

Look, it’s true that there are people earning millions of dollars in Primerica. But it did not happen overnight.

These people had a crazy work ethic, and they put in the time.

I promise you…

Network marketing is not some type of get rich quick scheme.

It takes a lot of time, effort, and a willingness to grow and learn new skills.

There are 3 main keys that you should be aware of when you’re building your Primerica business.

1. Commit

If you are going to take the leap and join a network marketing business like Primerica, then you need to commit to at least a year, no matter what happens.

You should expect to make zero money that first year.

If you make money, great.

But no matter what happens, give it your all for at least a year.

2. Build The Foundation

When you get started in the business, you will be given a plan to follow.

A very specific set of steps that others before you have taken to succeed in the business.

No matter what, you should follow the plan that is taught to you. It’s designed in a specific way for a reason… 

Because it works.

Remember, the people above you in the organisation have a vested interest in you succeeding because they will earn a commission whenever you make a sale.

So you can rest assured they will not steer you wrong.

At least not intentionally.

3. Duplication Is Key

Remember, the real money in network marketing is made when your team starts growing itself.

Without your efforts.

This only happens when your recruits are able to duplicate what you’ve done to build your own business.

This is why it’s important to do what you’re taught.

If you take it on yourself to learn high pressure closing tactics…

You might make lots of sales and recruit reps like gangbusters.

But your team will not be able to duplicate that.

In this case, you’re really not taking advantage of what network marketing truly has to offer…

Passive income.

You’ve basically just got yourself a sales job.

For a full guide to building a network marketing business the right way, be sure to check out this article.

Primerica | How To Get Clients Online

When you get started with the Primerica network marketing business, one of the first things you will be asked to do is to create a list of your friends and family.

Then you will need to sell them Term Life insurance or investment products.

This is a fine way to start in network marketing, even though it will likely push you WAY out of your comfort zone.

But eventually, you will run out of personal contacts to talk to about your business.

At this point you will probably turn to the internet, looking for ideas on how to get clients for your business.

Now I have to be honest…

I don’t know what Primerica’s policy is on using the internet to build your business.

I’m guessing it might be pretty strict because you can’t be giving out financial advice on YouTube or social media. 

Unless you want Uncle Sam to be mad at you.

So the internet might not be the best place to sell your financial products, but it could be a good place to recruit more reps into your business. 

Here’s what you do:

1. Define Your Target Market

In order to effectively market your business online, you need to decide who you are marketing to.

What type of person do you want to attract to your business?

As an example, you may want to target someone who already works in finance and is looking for a side income so they can invest more money.

Or perhaps you target real estate agents who are actively looking for a side hustle.

You can’t just go online and create generic content in the hopes that someone will be interested in what you have to offer.

If you want people to resonate with your message, you need to define what type of person you want, and create the type of content that they are looking for.

2. Create Content

As we discussed, you need to create content. The key to succeeding online is to always provide valuable content that people are actually searching for.

You want to become an authority figure, a thought leader in your niche.

If someone in your target market has a question that they’re asking themselves, then YOU want to be the first person that comes to their mind.

With this in mind, you can start creating content on whatever platform you feel most comfortable with.

A few options are:

• Start a bog
• YouTube channel
• Reddit
• Twitter, Instagram or other social media
• Related forums

Whatever platform you choose, always provide value.

There’s no need to mention your company by name. 

Ever.

3. Build A List

Once you have a bit of an audience built, you should start an email newsletter.

Find a way to entice people to join your email list.

Once people are on your list, you can start thinking about actively inviting them to check out your business or maybe schedule a phone call with them.

But value should still be your number one focus.

If you are not truly out to help people, they will not open your emails.

Like we said earlier, people’s BS detectors are strong so you should be putting a huge focus on actually helping people and giving them what they want.

I recommend keeping 80% of your emails completely value-based and 20% of them sales oriented.

This way, you have plenty of opportunity to actually make money while still helping people and enticing them to continue listening to what you have to say.

I learned this concept from Gary Vaynerchuk. Here’s a quote from his book Jab, Jab, Right Hook which perfectly summarizes this concept.

But while it’s true that you can’t land a solid right hook if you don’t set up the punch with a series of good jabs, it’s also true that no fight has ever been won on jabs alone. Eventually, you have to take your shot. – Gary V

Jab (value), Jab (value), Right Hook (make the offer).

For a full guide on how to build your MLM on the internet, be sure to check out this detailed article.

Top Earners In Primerica

Even though the majority of people in the business don’t make life changing income, there are plenty of people who really built successful Primerica careers.

Below are a few of the top earners in Primerica. 

Just because the average person doesn’t make a lot of money in Primerica doesn’t necessarily mean you couldn’t do it.

You are, of course, not merely average.

Primerica Benefits

The Primerica opportunity is certainly a good one if, and only if, you are ready to make a serious, long term commitment to this business.

And keep your expectations in check.

I like the business for the following reasons:

• They sell decent products
• Low cost to get started (when compared to other businesses)
• Can be done part time
• Can be built online
• No income limit

Primerica Negatives

It’s not all good though.

As I mentioned, this company is (at least partially) responsible for ending a relationship that was very dear to me.

So obviously I have negative feelings associated with this business.

But I’ve tried to be impartial about it.

While I do think it could be a decent opportunity if you have a passion for personal finance, there are a few definite downsides to this business.

• People are sceptical of MLM, so it could be a tough sell
• Cult-like atmosphere
• Can strain relationships
• Is way more difficult than they make it sound
• Most people do not succeed

I have no association with Primerica so I don’t care either way what you decide. 

But personally, I like the network marketing business model. I like the leverage it provides. 

But it is NOT easy.

Don’t let anyone convince you that it is.

Primerica FAQ

Primerica Company Review | Summary

To finally sum up this Primerica company review…

Primerica is definitely not a pyramid scheme or any type of shady scam or Ponzi.

They are a decent company that sells desirable products to end consumers. 

Thousands of people all over North America use these products, often without even realising that there is a lucrative business opportunity attached.

That’s really the big takeaway.

The vast majority of Primerica’s revenue comes from product sales, not recruitment.

This is how Oxford Dictionary defines a pyramid scheme:

A form of investment (illegal in the US and elsewhere) in which each paying participant recruits two further participants, with returns being given to early participants using money contributed by later ones.

And since Primerica’s revenue primarily comes from product sales, they certainly don’t fit the pyramid scheme category.

I hope that after reading this article, all your questions are thoroughly answered.

So that you can stop sifting through surface level Primerica business opportunity reviews.

At the end of the day, you could do well in this business if you take it seriously, commit for the long term, and have a passion for networking and personal finance.