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The Primerica Opportunity: An Independent Analysis

Sometimes I find amazing things in the comment sections of this blog.  Today I found an outstanding, research-based analysis of the Primerica opportunity.  In fact, it’s so comprehensive and well written that I contacted the author in hopes that she’d let me turn it into a guest post.  She did.

By Jennifer Macourek

** Disclaimer** I don’t know much about Primerica. I sell mattresses and have no interest in offering financial services or working as a financial adviser. My knowledge of either of those fields is extremely limited. **

One of my guests came into my store this afternoon with business cards from Primerica. He is a grandfather who has worked in data analysis for a great portion of his life and has since been unable to find work in his respective field. He told me about a financial services opportunity he was embarking upon, and was trying to rally other people in a similar position (given the current climate of the job market here in Jacksonville, FL and elsewhere) to join him as independent contractors. He was basically asking me and another associate in the store whom he’d met to refer others to him.

It just so happens that my friend has been looking for work in Jacksonville and, needless to say, has been having a tough time finding it. For his sake, I was interested in the company and learning more about it. Heck, who knew? Perhaps I’d find a way to earn a little extra income as well…

So, as a graduate with a degree in journalism, I did what I do best. I researched. I’ve read the Primerica Web site and numerous blog posts and comments, both for and against its reputation, products, the way its representatives present their products and the representatives’ breadth of product knowledge.

Again, I know very little of the differences in financial products, but I suppose at some point soon (I’m 23 years old), I’ll have to get knowledgeable.  I am simply writing to share the trends in the information (some well-organized and thought-out, some not so much) I have read and absorbed thus far and to offer my opinions based on that information for those interested in becoming a customer or employee of Primerica.

On its Web site, Primerica does not refer to positions for representatives as jobs, or even careers, merely opportunities. In that way, the company is not misrepresenting itself. However, nowhere on the Web site is there an admission that the structure of the company in MLM (multi-level marketing) and understandably so, there are plenty of negative connotations of MLMs, for example its likeness to a pyramid scheme. Still, it would have been nice for my guest to clarify that once I had expressed interest.

I have noticed a trend in the defenses of many (not all) of the self-proclaimed Primerica representatives on the numerous blogs and open discussions I have read. When addressing a negative claim about Primerica, many times the representative will pose a question or ask for support, unrelated to the claim. For example, in the comment section of one of the posts on this very blog, Xprimerican claimed that Primerica does not guarantee their 25, 30, and 35-year term policies for more than 20 years and often fails to inform their customers of this fact. SD, a Primerica representative, in reply, asked him to,

“Please provide facts that Primerica has ever raised their rates after the guaranteed period. In fact I have been here long enough to see people renew their term policies at a much lower rate than the original guarantee.”

The claim that one does NOT guarantee a policy past a certain point is not the same as one raising rates beyond that point.

Is it the fault of the company that its employees cannot overcome objections in a way that is, well… logical? Yes, and no. A company cannot measure its employees aptitude for properly defending its services against criticism. However, it is in a good company’s best interest to disseminate information that will EFFECTIVELY combat (meaning, with proof or justification) negative claims, especially those that have arisen on numerous occasions. That’s just basic public relations.

Instead of addressing or refuting claims with facts, I have noticed that many Primerica representatives (not all, but a good portion of those who choose to defend the company for which they work online) either change the topic by introducing an unrelated subject, dance around the issue without addressing it head on, or instead attack the character and/or background of the person making the claim.

AGAIN, I do not know anything about financial services. I’m basing my observations on how Primerica represents itself to the public and how Primerica representatives address questions and eyebrow-raising claims.

Still, after reading what I have thus far, I’ve come to the conclusion that Primerica is not a bad company, as extremists on a few of the blogs I’ve read have claimed. It is a business, and is run as such, with profit in mind.

In my opinion: The fact that the company is an MLM structure, allows Primerica to seemingly lure its employee and customer-base because, generally, it is friends and family selling to and recruiting more friends and family. With the knowledge that one is purchasing from a friend, what need is there to search elsewhere (i.e. research and shop) for better prices on a product or service that hadn’t really been considered before? You trust your friends and family (unless you have a good reason not to), so the business model is excellent in that it perpetuates more and more clientele and employees without the skepticism or mind set of, “This isn’t the lowest price,” because of that aforementioned trust.

The biggest problem with that business model, is that it can prey on that trust, making the company’s core belief in “doing what’s right for the consumer 100% of the time” extremely difficult to achieve. Quite frankly, I think it is impossible. As a competitive company, how can you possibly do what’s right for the consumer 100% of the time, when you offer limited products and services at prices which are not guaranteed to be the lowest, and furthermore do not inform your customer that the products and services you are selling may not be the lowest-priced and most fitting of their needs. If that were the case, the company would too often lose chances at the untapped consumer (dissimilar to losing opportunities for competitive business i.e. changes from a pre-existing policy to a lower-priced option with Primerica) because you’d be compelled to let a consumer know if and when there are lesser-priced, better options available that will offer a solution to their problem, regardless of whether or not Primerica is the company which offers those options. And make no mistake, for people trying to climb their way out of debt or save money for their families, the lowest priced, best option is the “right” thing. In order to live up to its core beliefs (as found on the Primerica Web site), representatives of Primerica would have to be not only be honest, but forthcoming, keeping the consumer’s best interest (and not the bottom line of a nice commission check) in mind. That’s a tightrope that any moral salesperson walks, more especially, I would imagine, in an industry that is selling financial solutions. I certainly believe there a representatives within Primerica that adhere to such principles and genuinely seek to help others, doing so to the best of their abilities with the skills they’ve learned as salespeople and the certification they’ve received relevant to their industry.

That being said, the burden of GETTING the “right” thing completely lies with the consumer. What can one expect of a profit-minded business? When preparing to make a purchase or sign a contract that could potentially affect one’s life, it is the consumer’s duty to be informed, responsible and savvy. Thus  a consumer’s biggest mistake is made without those qualities; believing that someone who has pitched a product or service is an expert of their field instead of assuming he is merely well-versed on his product and the objections which his product most frequently faces.

But as I understand, those type of consumers, the informed kind, are generally not the bulk of Primerica’s clientele (as quoted from an articulate Primerica representative). So after purchasing Primerica’s products or services and becoming a believer (why, otherwise, would you have become Primerica customer/representative if you did not believe), a new customer/representative could understandably continue the cycle, unknowingly perpetuating information that has been regurgitated to him with possible omissions of the truth, and feel completely validated because he’s passed a test and thus delivers his presentation as fact. That’s doesn’t just happen in Primerica, it happens in most sales positions.

At the end of it all:  If you’re looking for a position where you can make money in SALES with hard work after some provided training and certification, then Primerica may well be a great option. Just don’t let the corporate climate affect your perception of what it really is: sales. If you’re hoping to be a savior for those having financial problems who are seeking counsel, while happening to make some money in the process, become a financial adviser.

As far as potential consumers are concerned, a good consumer is an informed consumer.

 

Jennifer Macourek is a  Florida native, born and raised in Miami, and currently living and working in Jacksonville.  She graduated from the University of Florida with a degree in journalism with a focus in book publishing and editing.  She hopes to use her writing skills to pursue a career in legal writing. For fun, She enjoys attempting to write poetry and short fiction, most usually of satiric nature.

Jennifer can be reached at: jennifer.macourek@gmail.com

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If you’re interested in learning more about Primerica, be sure to read the other posts and the outstanding comment threads on this blog (comment numbers are as of this posting).  Just type “Primerica” in the search bar above, or follow the links below:

 

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5 Simple Ways to Dig Yourself Out Of Debts and Save Money

A guest post (and good advice) by Amy Lewis

If your debt issues are spiraling out of control and stress is eating you alive, then it’s time to get serious about managing your money. Read on to know the following ways to turn your finances around and make your bank account look better so that debt problems won’t catch you off guard. If required opt for debt settlement programs which might relieve your debt loads considerably.

Keep a track of your swamping debts

Your first and foremost duty is to take into account the huge debt which has been taking its toll on your paycheck and savings . Tally up your financial obligations, monthly income and set expenses such as utility bills. Get clear estimates of your financial obligations by reviewing your bank account statements and credit card bills thoroughly.

Plan effectively

An effective budgeting plan can be your savior in this debt crisis and can help you sail through the troubled water. Formulate a plan based on the amount you afford to allocate in each category of expenses every month. Make sure a certain amount is earmarked for savings in the rainy day and retirement funds. Conduct a weekly budget meeting with your spouse and stay accountable to each other while assessing your budgeting plan and its execution.

Cash instead of credit

Start cutting up your credit cards and use cash or debit card instead for variable expenses, such as groceries and incidentals. You can use a tried and tested trick here. Segregate certain amount of cash to envelopes marked with the categories and spend wisely within the limited means allotted for each category. Remember, don’t close the credit card accounts if you have an outstanding balance or still owe money on those accounts.

Save in an emergency fund

Aim at saving $1,000 in an emergency fund. While saving for unexpected financial urgencies, don’t forget to pay minimums on your other debts. Make sure you have built up a cushion in the bank so that if any emergency turns up, you don’t have to turn to credit cards or pay day loans for help.

Pay off debt

To pay off your outstanding debts follow simple strategies. You can opt for a Dave Ramsey’s method. Here you need to reimburse your smallest debt first. Add a little extra each month to pay off that debt until it’s completely gone. At the same time keep on paying the minimum on your other debts. Once you finish with the smallest one start repeating the same tactic with the next smaller account. Remember, the sooner you pay off the smaller debts, greater amount you free up to pay off the larger ones.

To conclude, follow the above mentioned points and keep your self motivated. Strive hard to get rid of your debts and start saving for your brighter future.

Sheila Harsdorf vs The Boogeyman

“If I could give three words of advice, they would be ‘tell the truth.’ If I got three more words, I’d add: ‘All the time.’ –Randy Pausch, in, The Last Lecture

Here’s the thing we have to remember: Politicians use language.  They search for phrases that will resonate hypnotically within us.  Good political phrases are like gold to politicians, because with them, they can frame the issues and easily influence us.

Take the phrase, “Tax Relief”, for example.  President Bush’s team came up with that one and he made magic every time he used it.  Why?  It totally frames the issue of taxes.  In order for there to be “relief” there has to be an affliction.  It’s a perfect frame.  That one little phrase influenced the way millions of Americans thought about taxes.  Instantly “Taxes” became an “affliction” for which we all needed “relief.”  We haven’t been able to have an intelligent discussion about taxes since

Over the past few months, we’ve heard Harsdorf and Walker refer to the “Special Interests” involved in the recalls, hoping that voters wouldn’t think about who that really is.

It’s a strategy that allows Harsdorf to appear to be protecting tax-payers (who need relief) from something scary — kind of like the boogeyman.  It’s a fear Harsdorf wants you to have.  She needs there to be a “special interests” boogeyman so she can protect you from it.

But remember when you were young, and you thought the boogeyman was in your closet? Remember how foolish you felt when your mom turned on the light and it was just a lump of dirty clothes?

Unlike our moms, Harsdorf wants to keep us in the dark—and very much afraid. That boogeyman she’s calling “special interests”?  Yeah, those “special interests” are the teachers at your school, organizing food drive competitions between classes two weeks before Thanksgiving.  It’s the non-profit broadband provider, WiscNet, bringing affordable internet access to your libraries, public schools and universities.  They’re the police, firefighters, snowplow and ambulance drivers keeping us safe.  It’s the dad across the street, ashamed because his kids’ clothes are too small.  You know these people.

While collecting signatures to recall Harsdorf in my hometown earlier this spring, I was often confronted by angry Harsdorf supporters.  Repeatedly, I was asked where I came from and how much I was getting paid.  They didn’t believe me when I said I was from St. Croix Falls, and was paid nothing. When I told them I was a teacher, many called me a freeloader—or worse.

It shocked me.

Upon reflection, however, it makes perfect sense.  These angry Harsdorf supporters believe and trust her.  They were afraid.  And I was the boogeyman.  My hope is that enough people will turn on the light and begin to wonder—if Harsdorf isn’t telling the truth about special interests, what else is she lying about?

Direct Buy controls sales pitch

A few years ago, I posted about an experience I had at a Direct Buy sales presentation. To date, that post, and the couple I did as a follow up continue to be in the top 5 all time in both traffic earned and comments submitted.

Turns out, lots of people want to learn about Direct Buy before they go to a presentation. Lots of people want to vent their buyers remorse. And a few even want to defend their memberships. Every once in awhile, a person will email me personally to ask advice about how they can get out of their contract (as if I have a clue).

This by no means is proof that Direct Buy is “evil” or a “scam”, or even a “bad deal.”

The percentages make sense. Happy customers just aren’t likely to be searching for information on Direct Buy. And they’re certainly not as likely to voice their satisfaction in public forum–much (I’m sure) to Direct Buy’s chagrin.

This post is not another personal commentary on the company. For the record, I don’t really have an opinion about them. The deal wasn’t for us. I thought it would make an interesting blog post. I’ve moved on.

But today I got another personal email from someone (who did not leave their full name) that I found interesting and enjoyable to read on a number of different levels–the least of which has anything to do with Direct Buy as a concept or a company.

So I figured, if I liked it, I thought you might too. Here you go (I’ve changed employee names to protect the innocent but apparently um. . . ill-trained. And to avoid getting in trouble myself:

Dear Chris,
I was thrown out of a Directbuy sales presentation for what I believe to be asking too many of the wrong questions.

I have been a sales professional for the better part of 12 years and have dealt with every type of customer personality there is. Today, I got to be a sales prospect at Directbuy of Baton Rouge, La 14141 Airline Hwy. After having seen a TV ad for their service, I made a call and set up a visit for Saturday 6/19/2010 at 2pm cst.

Directbuy’s sales approach is very clever, and very, very structured. Directbuy grabs total control over the sales presentation.

Oh, before I get too far down the road, you need to know that when you visit them, you are going to get a sales pitch. I have nothing against selling especially since it’s what I do for a living. But the closest thing I can think of to describe their approach is that it’s like being invited on a 2 day weekend to a Florida resort all expenses paid, only to become a captive for a sales promotion.

You are only allowed to come by appointment, if married both husband and wife must come, and if you have children, LEAVE THEM AT HOME! As you might have begun to figure out, Directbuy wants you and your spouse to be under their control, without any distractions, for at least 1 1/2 to 2 hours.

I am still ok with that.

There were many times when greeting my sales prospects I wished they had left their kids home, and that I had BOTH spouses present (to avoid getting the “I have to talk it over with my spouse” sales objection).

What happened today however came as a complete surprise and prompted me to write this review.

The issue I have is that the sales rep, Alan, was not properly trained to deal with questions that did not have a pat, scripted answer. He became increasingly frustrated that some of my questions (and his answers) made Directbuy membership appear to be less of a value than being represented.

Since the presentation was given to three couples in a group, he became concerned that the questions I asked, and the answers he had to give, could ruin his chance of selling either of the other two couples on their $4,790 membership plan.

Near the end of Allan’s presentation, he asked me about the price I paid for a front loading LG washer, steam dryer, and matching pedestal stands at my local big box store. I was supposed to say “$3,000 plus tax and delivery”, to which he was supposed to flip over his little sales pitch card showing that Directbuy members only pay $2,182 for the same set.

Only problem for Allan was that I answered, before the group, that I only paid $2,200 including tax, delivery, and set up!

He then tried to attack me personally by suggesting that “Directbuy isn’t for everybody… If you want to spend time hunting for deals then go ahead”.

To this I answered, “everybody is looking for a deal, that’s why I am here in the first place”!

This was all he could take! He called me and my wife away from the group, and ordered us to leave. I asked what the problem was, and all he could say was some gibberish about the way I was conducting myself, and that he did not have to state why I was being ordered to leave. He even said he’d call the police if I refused to go immediately.

The “fake” Mr.Friendly veneer came off, and he turned on me and my wife like a scene from Invasion of the Body Snatchers!

Upon reflection, I think his background did not allow him to risk giving up total control of a situation or being made to look inferior.

The irony of the whole thing is that my wife and I were the only ones in the group that he had ANY chance of selling! I am wondering if Craig and his wife Jenny from got thrown out too?

Craig was also asking legitimate questions that Alan could not always give a “good” answer to.

The take away here is that if you go to Directbuy, don’t ask any questions that challenge the sales person and might diminish the value of their membership.

They tell you once you are there,

  • “you will only get one chance to join and it’s now”.
  • “You either sign up today, or you’ll never be able to join again”.
  • Since I was thrown out because Alan didn’t like me, I guess I will never know whether or not it’s worth it to join Directbuy. I do plan to take this up with his boss, and Directbuy corporate offices.

    Remember…”Dont ask the wrong questions!!!”

    Upton Sinclair

    Upton Sinclair said, “It’s difficult to get a man to understand something if his salary depends on him not understanding it.”

    I really liked this quote. I think I’ve actually run into this phenomenon in a couple of arenas (of my life) recently. It certainly would explain some things.

    A little context:

    I’m a clean energy nut and was recently reminded of this quote in this post.

    As I’ve mentioned before, every once in awhile, this blog produces a slight profit. It’s nothing I can count on. And it’s not very much, so when it does, instead of blowing it, or using it to pay off debt, I’ve begun to tinker with Sharebuilder and invest in some clean energy ETF’s.

    So far I’ve been at it about 6 months, and while I’m not losing any money, I’m certainly not making a killing either. Truth be told, as of today, I’m about 5% up. I’ve been up as much as 10%, and I think I’ve been down about as much as 5%.

    Let’s be clear. I’m not playing the market. I’m not buying and selling. I’m buying and holding. I’m in long. As the post I linked to alluded to, either I’m insane or the world’s in denial.

    I hope it’s the later.

    Primerica and the end of the SMART loan

    I’ve been meaning to post an update about my experience with the Primerica SMART loan for some time now. Many people have come here seeking information about the SMART loan, and since I had had a positive experience with it, I wrote and posted that experience here.

    As a blogger, I’ve been riding the Primerica horse, on and off for a while now because it is stimulating such good discussion. A quick search around the web will prove that this isn’t the only blog that gets a traffic boost via the Primerica topic. But people have said (and I pride myself on this) that this blog has been the most even handed. There is a lot to talk about. The mortgage, the insurance, the mutual funds, the career opportunity.

    There’s a lot of passion and emotion around this topic too. Money is a big deal for people. But so are career choices. So I think for people who currently are, or have been vested in all things Primerica, it seems easy to get your hackles up.

    As I said, I’ve had experience with the SMART loan and wrote about that, but I’ve also been fortunate enough to get a few guest posts, so you’ll also find a few of those here painting Primerica and their products in both a positive and a negative light. The following is a list:

    The SMART loan (positive), by me

    The SMART loan (negative), by Ken

    The Primerica Opportunity (positive), by CCleader

    The Primerica Opportunity (negative), by Ken

    And now, finally, this follow up post on my experience with the SMART loan, almost 5 years since I began with it.

    It started (again) last January. Mortgage rates were going down (again), and so I called Rob to see what we could do. At first, he told me a refinance with Primerica would be at a rate of 6.44. Then after I dug around a bit, he remembered something about the equity builder program and the actual rate I’d get would be 6.19.

    Well. At that point in time, I knew we were past the prepayment penalty phase (3 years) with Primerica, so I thought it would be wise to shop around a bit. Keep in mind–unlike last time, I didn’t want to consolidate any debt this time. I just wanted a straight up refinance to see if I could save some money on my payments.

    As it turns out, this was a good thing. With the mortgage meltdowns and the resulting drop in home prices, our equity in the house was just at the loan to value threshold that a bank would accept. Bottom line, at that time, nobody was about to give me any money if I’d wanted it.

    Good thing I didn’t want it. So right away, our situation was different than when we went with the SMART loan those years back.

    Anyway, I started doing my research. And without boring you, our local bank (that used to have our loan before Primerica) had 20 yr loans at around 5%.

    The problem here is that I didn’t want a 20 year loan. My loan with Primerica only had about 16 years left. I want to pay it off sooner than 20 years. That was one of my main reasons for going with the SMART loan in the first place. And I know that we don’t have the discipline to prepay if we don’t have to–that is, if it isn’t built into the payment structure.

    So I looked over a line. The Riverbank (my local bank) was offering a 15 year mortgage at 4.5%. My heart skipped a beat and I started crunching some numbers.

    Keep in mind that there are a couple of things I felt very strongly about.

    1. Biweekly payments–regardless of the loan, I wanted to continue with biweekly payments, taken right about the same time I got paid every other week. Simple interest, or regular interest, doing this is the fastest way to pay off a loan. We began doing this with the SMART loan. And it’s a very good habit. This is a sort of discipline and expectation thing.

    2. I wanted these payments to be taken out of our account automatically. Again, this seems silly, but I don’t want a choice. If I have a choice, I might not do it–again regardless of the loan.

    3. Total cost. Money is tight around here. Sure I could make things easier for us by pushing our mortgage out to 30 years again. But I figure, the sooner I can pay off this bugger, the lower the total cost of the loan, the more money I’ll have in the long run . . .right? So we drive beaters and it takes us forever to get new siding and we wear hand-me-downs and shop at garage sales. Still. Life’s good . . .right?

    Anyway, that’s where I’m coming from, and that’s the path I hope to continue down. Our biggest challenge will continue to be to NOT take on more debt. When you’re fixed expenses are high. Sometimes that has to happen. It’s a balancing act.

    For us, it’s tight. Still, I think I’m making the right choice. I hope I am, anyway–time will tell.

    So after I crunched them, here were the numbers. Keep in mind that these results include the biweekly simple interest calculation that SMART loan boasts:

    primerica-table

    It’s pretty clear that if I could get the 4.5%, this was the way to go.

    I could save $87 every two weeks. $174 a month over what we were currently paying. Compared to the Primerica offer, I’d save $31 every two weeks or $62 a month. But the real kicker was the total interest I’d save by going with Riverbank. $25,754!!!

    That’s like a new car!! A nice one! Or a good chunk of tuition. Or something.

    This was in February though. I wasn’t sure the rates would hold. We still had to go through the application process, get another appraisal, all that.

    So I ran the numbers for a 15 year at 5%, just to see. In that case, the biweekly payments would have been $565, and the total interest would have been $52,804.

    Still less!!

    The bottom line, is that we went with Riverbank, and hopefully this will be the last time we need to refinance this loan. We totally lucked out and got the 4.5% rate. I’m not sure rates will ever drop lower. I’ve been watching and I’ve never seen them lower around here. So like I said, I think we lucked out.

    At this point, I think a lot of people will draw the conclusion that a local bank is always going to be better. I don’t think so. I still stand by my decision to go with the SMART loan the first time. Maybe I was wrong. But I don’t think so. We were consolidating a lot of debt at that time. Rates were different at that time.

    Regardless, I know for a fact that life got better after the SMART loan. Could it have been even better if we had gone to the Riverbank then? Like I said. I don’t think so. I’ll be honest, maybe it’s my pride speaking, but I honestly don’t think so.

    The bottom line for us is that we are better off now with a traditional loan. Much better.

    Still . . .I’m not about to bash Primerica. I truly believe they helped us. We still have our life insurance with them. And yes, I’ve crunched those numbers (and will continue to do so) just like I did with the mortgage. I haven’t been able to find cheaper life insurance.

    And our Primerica rep came to our house and helped us figure things out.

    Still, I never gave up the idea that this is my responsibility. And I never stopped looking for a better deal.

    And I never will.