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jca's avatar

Is Primerica a scam or is it legit?

Asked by jca (28674 points ) October 8th, 2009

one of my coworkers asked me if i knew what Primerica was, and he explained that they have meetings where you go and they teach you to help people with their finances. I cannot attend, and i would not attend even if i could, because i am skeptical of things that don’t sound right. However, i did google it out of curiosity to see what i could find out, and i see all these things where people have asked what i’m asking, “is Primerica a scam?” The fact that these things are mentioned makes me think it is. Why a legitimate company would need regular people without financial experience to help other people with their finances just does not make sense.

Does anybody have any first-hand experience with this or know if it’s a scam or pyramid scheme?

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2 Answers

dalepetrie's avatar

A scam, no…a pyramid scheme…kind of. Essentially what they do is get warm bodies to sell, sell, sell. What they want is people with a lot of contacts or who are willing to cultivate them and yeah, the get them to go to financial planning meetings. The people they “hire” are trained, but they’re not paid, what happens though is they craft a retirement savings plan or what not, basically get you to tell them your broad goals and all it takes is a person with some organization skills to be able to put it all together to make the plan coherent. Like you may want to retire early, but the Primerica rep will get you to decide something more concrete, like you’re 32 now, and you want to retire at 55, so if you have to save for 23 years and we can get you x rate of return on your investment, this is how much you’d need to save out of every check. And hey, once you have all that figured out, which let’s face it, anyone with a couple brain cells to rub together could do, the person just needs to put these goals into their computer program and what serendipity! They have an investment vehicle they offer through their own investment arm that would be PERFECT for you. And of course when you buy into their investment vehicle, some of that money is taken as a fee. Then a percentage of that money goes to the person who sold you the investment vehicle (you get a cut every time they make a deposit, so ideally you get them to save $50 out of every check, OK, maybe they take $2 out of this and you get a buck of it, every two weeks, so you sign up enough people it could be lucrative). Of course then that other buck is split between the person who signed YOU up, and the person who signed THEM up and the company itself. Of course I have no idea if that split is the actual split, just giving you an example.

In other words, the pay structure is exactly like a pyramid scheme, but it’s not a Ponzi scheme…they do offer a legitimate service, they do offer investment tools, but it’s mostly automated and what they really need is warm bodies with contacts and/or the ability and willingness to harvest them. I get calls from them all the time, they search resumes, they know I’m an Accountant, so I could use their tools easily, but I always tell them I’m not a sales person, I have no desire to be a sales person, etc. I guess it’s as much of a pyramid scheme as is any organization with a sales staff. Last time I did payroll for sales people, if salesman A made a sale, he got money and so did his boss, and so did the company. So in as much as any sales job is a pyramid scheme, yes, but I’d say at least this IS an honest one. Primerica was last time I checked a wholly owned subsidiary of Traveller’s Insurance, and they’re not exactly some fly by night outfit.

weebler76's avatar

It’s not a scam or a scheme. It is a legitimate direct sales/network marketing company. For some reason a lot of people seem to think that anything with a multi level compensation plan is a scam. That’s kind of silly if you ask me, because every company that has employees has a multi level comp plan. The only difference is that in a legit network marketing company you don’t have a boss and you can pass the person who recruited you, both in rank and income.

In direct sales the whole idea is referral based marketing. Word of mouth advertising is the best kind. Network marketing just gives you the opportunity to get paid for your word of mouth advertising. The Primerica reps do have some financial knowledge. They have a very good training program for their reps.

That being said there are many direct sales/network marketing opportunities out there that I feel are much better.

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