Prime America Life Insurance - The Multi-Level Marketer (MLM) of the Insurance Industry
Massive amounts of time and effort is resourced by Prime America Life Insurance to recruit new agents. This recruiting did work well for Prime America Insurance's A.L. Williams. Mr. Williams founded the predecessor to Prime America, A.L. Williams and Associates, in 1977 at the age of 35. A.L. Williams and Associates became Primerica Financial Services in 1991. By 2006, A.L. Williams had a net worth of 1.5 Billion Dollars. Not bad for an insurance agent.
Keep It Simple Stupid (KISS) - Should Really be PrimeAmerica's Logo
A.L. Williams and Prime America Insurance got rich by using the multi-level marketing technique to constantly bring in new agents. The new agents would get a standard training which was highlighted by a weekly video conference call that was seen by upwards of 100,000 agents each week. Mr. Williams was the presenter during these video conferences and it should be noted that Mr. Williams' childhood career aspiration was to be a NFL football coach. Recruiting insurance agents was Mr. Williams' forte.
The Policies that Prime America Insurance Sells are Incredibly Simple
Term Life - Pay so much per month for 10 or 20 years and the policy ends. Prime America agents are encouraged to solicit investment money for highly commissioned mutual fund investments products during their sales presentation. Ignoring the tax advantages that the life insurance policies receives when combining life insurance and investments on the same transaction. I guess explaining the tax advantages of universal or whole life would be too complicated to explain to 100,000 insurance agents over a video conference call.
Prime America's Insurance term life policies are simple. A very simple application. The medical underwriting is not extensive. Underwriting is the term to describe how the life insurance company checks out the applicant before issuing the policy. Since Prime America Insurance is not checking the physical health of its applicants in a thorough manner, the premium rates are extremely high.
If an applicant is in terrible health, then Prime America Insurance maybe a good value. Yet, a large percentage of potential clients are able to get much better value for their money by applying to a life insurer that checks their medical condition completely.
Prime America Life Policies is Overpriced for the Vast Majority of Applicants
Your life insurance agent should be your professional shopper. A person that can explain the tax consequences of investments and life insurance. Your life insurance agent should be able to help you apply to the insurance company that will give you the best value for your money.
Prime America agents represent only Prime America. A traditional life insurance professional will represent multiple life insurance companies and present to you the application to the insurer that, based on your physical health and other factors, will give you the best value.
Commissions to Agents are Extremely Low - Which Allows Layers of Recruiters to Earn
The Prime America agent is not a professional shopper. He or she was recruited by a local office and instructed to contact every person that they know to sell term life insurance and mutual funds. The recruiter will join the new agent on the appointments and, in essence, split the commissions.
The recruiter of the recruiter will also be splitting commissions. The recruiter of the recruiter of the recruiter will also be taking a cut. The local office rent and expenses also has to be reimbursed.
The new agent will sell dozens of policies to his relatives and friends during the first few months of Prime American employment. Afterward, the new Prime America agent will get smart and find new employment or he/she will become a recruiter for Prime America.
Soliciting Distant Relatives
New Prime America agents should be prepared to solicit:
- Every distant cousin.
- Every guest at their wedding.
- Everyone in their high school year book.
We are in the Age of the Internet
It is getting harder to deceive people. More than ever, clients realize that if the insurance company is more careful on who they are accepting then that policy is better value for relatively health applicants.
Agents realize that if you eliminate the local office and layers of recruiters then their is probably more money to compensate the actual sales person.
Shopping online is easy. The term life quote engine at the top of the page shows over 100 life insurance companies. Probably a good idea to apply with a professional shopper/agent that can get you the best value.
Life insurance can be purchased over the phone. Is there really a need to sit at the kitchen table with an insurance agent? Obviously the answer is no. Clients are getting smarter.
The situation of new agents has changed for the better in recent years. An organization called NAAIP will give any agent needed resources at no cost or obligations with the expectation that a certain percentage of agents will end up selling via their contracting.
The quote engine that you see above is free (no cost or obligation) to any insurance agent. With NAAIP, layers of recruiters are eliminated if one decides to join them. Better compensation is afforded to the actual agent. Better value to the clients since over 100 insurance companies are offered via NAAIP.