Review of Primerica Life Insurance Company
Are you considering Primerica Life Insurance but want to make sure you are getting the best life insurance rates in the marketplace? In this Primerica Life Insurance review we will look at the company, what is its history, advantages, shortcomings and offer an alternative.
Before we dive in to our Primerica Review, just know that…
At TermLife2Go, we offer:
- Different types of life insurance from
- the top rated best life insurance companies in the United States,
- along with the top no exam life insurance companies and
- the top final expense companies.
So stop by our life insurance quotes page to see just what we can do for you.
And you might be interested in watching our video below on the importance of comparing life insurance companies and policies, rather than limiting your options to just one company.
Primerica Life Insurance (also referred to as Prime America) is one of the more popular companies that offer term life insurance to millions of people. The name itself is well known and regarded in the industry for its financial products and services as well as its life insurance. The structure of Primerica Insurance however is unique in the way that it sells its product through more than 100,000 independent sales representatives.
About Primerica Life Insurance
Other Prime America Life Insurance reviews might have made the point that this company is associated with insurance and financial services. Currently an independent company, Primerica Insurance is focused on the sale of term life vs whole life insurance.
In addition, there are other financial services and products that include the following;
- Annuities, Mutual Funds and Segregated Funds
- Auto, Home and Long Term Insurance
- Pre-Paid Legal Services, Credit Monitoring and Debt Management Plans
The company currently has insured over 4.3 million clients for life insurance.
The History of Primerica Insurance
Primerica Insurance was founded in 1977 by Arthur L. Williams, Jr. His company designed the firm as one that would mass-market the concept coined “buy term and invest the difference”. It is this slogan, adopted by many financial entertainers such as Dave Ramsey and Size Orman, that helped propel Primerica to the largest seller of life insurance in the U.S.
This creative thinking is what drives Primerica Insurance today as the Company encourages middle-income families to purchase less-expensive term life insurance at affordable rates so that families can take the money that would otherwise be spent on more expensive whole life insurance and invest it in other ways, such as individual retirement accounts, stocks, bonds, etc.
By 1980, Primerica had contracted with the Massachusetts Indemnity and Life Insurance Company, a large underwriter of life insurance, owned by PennCorp Financial Services. By the following year, the A.L. Williams Corporation was officially formed originally under the name First American National Corporation which acted as a holding company for life insurance. By 1982, the Company began as an over the counter public stock and by the following year it was listed on NASDAQ.
The actual name “Primerica” (some people mistakenly search for “Prime America”) was created under a unique set of circumstances. The PennCorp company had grown considerably in the early 1980s and they were focused on the replacement of aluminum cans by plastic which was seen as a popular trend at the time. PennCorp managed to sign a merger agreement with American Can as part of this changeover to plastic and the result was American Can became the parent company of PennCorp which was in turn the parent company of A.L. Williams Corporation. By March, 1987, American Can decided to change its name that it had held since 1901 to Primerica and the term stuck with its subsidiaries. Source
Primerica Life Insurance review: 3 Advantages
There are a number of benefits to joining Primerica Insurance when it comes to their insurance and financial services. The Company’s business model has been around for decades and the Company has enjoyed a considerable amount of success thanks to using the multi level marketing structure. Primerica is one of the largest writers of term life insurance in the United States. A few advantages are as follows:
1) Competitive Life Insurance Rates
Term life insurance rates are less expensive that whole life insurance which means that you can get good coverage at a very reasonable rate. For many this is a great way to protect a family from financial disaster in case the unexpected should occur because the premiums on term will not put a huge dent in the budget. But as we will point out in the disadvantages section below, Primerica Insurance Company’s low premiums are not low when compared head-to-head with other industry leaders.
2) Strong Brand name
When it comes to Primerica Life Insurance, the Company’s 100,000+ sales representatives are pretty gung ho. We have talked to clients who choose Primerica Insurance over a lower priced competitor simply because of the sales agent. The reason being, typically the sales agent is a family member. This creates a huge loyalty on the prospective insured who would rather pay higher premiums, than go with a lower priced policy with an agent who is not family. While this is not the best choice from a financial perspective, we can certainly understand it from a loyalty perspective.
3) Primerica Financial Ratings
A.M. Best Rating: As of August 2017, A.M. Best Affirmed its A+, Superior ratings of Primerica, Inc. and Its Subsidiaries. Primerica Life Insurance Company has maintained this A+ Superior rating for over 12 years now, since 2005. This is one of the top ratings offered by A.M Best and demonstrates Primerica’s commitment to its policyholders by maintaining one of the top ratings in the industry.
In addition, its Long-Term Issuer Credit Rating is aa-, which is also a top rating, demonstrating Primerica’s ability to meet its ongoing senior financial obligations.
The only real knock A.M. Best Company has regrading Primerica Life Insurance Company is that the company does not have a lot of diversity in its product line since it primarily focuses on term life insurance.
Primerica Life Insurance Review: 7 Disadvantages
1) No Conversion Option
Primerica is one of the few that does not have this feature. While conversion is something most people do not think of when first getting term life insurance, it will become necessary if you develop some sort of illness or disease down the road that would preclude you from getting future life insurance. Without a conversion option you would be uninsurable and out of luck if you developed a disease, such as heart disease or cancer, down the road.
What Primerica does have is the ability to renew the policy upon expiration. This appears to be sold as a “conversion” option. Every term life policy worth its salt has a clause which allows the policy owner to renew the policy annually. This is a guaranteed insurability option, renewable to age 95. But here is the kicker, the cost of insurance is going to skyrocket every year, eventually pricing you out of the policy.
2) Higher Rates
When compared to many other life insurance companies, what Primerica offers is generally on the high side when it comes to term life insurance premiums.
3) No Medical Exam Option
Nowadays, innovative accelerated underwriting allows clients to get insured at up to 1/10 the time of a more traditional policy requiring a life insurance blood draw.
Unfortunately, Primerica does not offer no exam life insurance. Update as of October 1, 2017: It appears that Primerica does offer coverage without requiring blood work, as per a visitor’s comment.
If you have an existing health condition or you are considered a high risk Primerica might not be the best choice. For example, Primerica might not be an ideal candidate if you are looking for life insurance with diabetes. Instead, there are a few life insurance companies in the United States that may offer much better rates and pricing.
6) Captive Agents
If you choose to go with Primerica for your life insurance provider you are limiting your options to that one Company. This is a similar knock we have for other captive agents, such as State Farm and Globe Life. The agents at Primerica are captive agents, meaning the agents sell ONE company, and only ONE company—Primerica. And since Primerica only offers term life, you are limited to ONE company and ONE type of policy.
Contrast that with the many companies that allow independent agents to sell their products. If you are talking with an independent agency, such as TermLife2Go. We will compare life insurance quotes from many of the top companies. So rather than only ONE option, you will have many options. And then YOU choose which option best suits you.
7) No Permanent Life Insurance Option
In certain instances, cash value whole life insurance is better than term life.
There are two main types of permanent coverage: Whole Life and Universal Life
The best whole life insurance includes cash value growth and policy dividends. These policies provide many advantages, including supplemental retirement income. The cash value grows tax deferred and there are no early withdrawal penalties or required minimum distributions.
Universal life insurance comes in three flavors, guaranteed universal life, indexed universal life and variable universal life. Guaranteed universal life provides certain “guarantees” that help keep your policy in force, so long as you meet the minimum premium requirements.
Indexed universal life (IUL), like whole life, also builds cash value and can provide a way to earn more interest than typical whole life. Indexed policies follow a certain market, such as the S&P 500 and offer policy growth based on how that market performs. However, you do not have the same risk as you do with variable life, since IUL policies offer a 0-1% guaranteed floor that limits your downside risk.
Primerica Life Insurance Reviews: Conclusion
For over 4.3 million people, Primerica Insurance is the provider of life insurance that fits their needs. But while Primerica Insurance does offer some excellent features for a term life insurance company, it is certainly not for everyone.
A good way to evaluate what Primerica Insurance has is by looking at the complete package of term life insurance—pricing, financial rating, term length, and available riders (including a conversion option). In doing so you may find that you need an alternative.
Primerica Life Insurance Reviews: An Alternative
When shopping for the lowest price on life insurance it is imperative that you have choices. We at TermLife2Go have a 2-step alternative for anyone considering a life insurance policy from Primerica Insurance.
Step 1: Give Primerica a call. See what they have to offer and the pricing.
Step 2: Give us a call and compare. See if Primerica Life Insurance is the best company with the best price for your insurance needs. With dozens of top rated life insurance companies to choose from, you might save thousands of dollars over the life of your insurance policy by going with another carrier.
We do not favor one life insurance company over another. Instead, we find out what you need and then we recommend the lowest priced, best life insurance company to meet your specific need. Therefore, if price and the best policy matters to you, give us a chance to earn your business. We are here to serve you!
So, what are you waiting for? Give us a call today to see what we can do for you!
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