Primerica

NOTE: "This is a research paper that I wrote for my finance class. I got 45 out of 50 on this. If you are interest in pyramid scheme business or multi-level market, you should read it."

In 1965, Williams’ father suddenly died of a heart attack. He had a whole life insurance policy that left their family underinsured. Williams realized that people have no idea of such as product, believing that families were paying too much for whole life policies that left them poor in the wallet and deeply underinsured. Therefore, he joined his cousin at ITT Financial Services in 1970. Thus, his life was transformed.

In June 1973, he got on board with Waddell & Reed Williams gained momentum at W&R, and became regional vice-president. In February 10, 1977, Arthur L. Williams found A.L Williams & Associates based on the concept of “Buy Term and Invest Difference.”  Today, what was formerly A.L Williams & Associates Marketing is now Primerica Financial Services. Primerica is always there for families’ money solutions.

Primerica has helped people to make more money, save more money, and reach their goals. Briefly, 76% of survey respondents said they always or usually live paycheck to paycheck. Also, 57 % of all workers surveyed have save less than $25,000 toward their retirement and 26% of worker expect to work past age 70. Only 44% of households have individual life insurance policies, and 30% have no individual or employer-provided life insurance. Furthermore, almost eight in ten people don’t have an insurance agent or broker. The average American family carries $8,220 in credit card debt.

Therefore, the mission statement of Primerica is to help families earn more income, and to become properly protected, debt free, and financially independent. Primerica is the largest independent financial services marketing company in North America. In Primerica, term life insurance is important to families. Primerica paid out $1 billion in death claims in 2012, more than $675 billion of life insurance in force and have A+ (Superior) rating from A.M best. This is exceptional, because only 15% of life insurance companies meet this standard. They also pay 92% of claims within 14 days.

In addition, Primerica has over 5,000 offices in the USA and Canada. The headquarters is located in Duluth, GA (near Atlanta) with over one million square feet. It has its own zip code and has 2,000 employees working there. Primerica has more than two million client investment accounts and more than four million lives insured. The companies paid an average of three million in benefit claims every day. Also, Primerica is listed on the New York Stock Exchange as PRI. Although many assume Primerica is a scam, Forbes recently named Primerica one of America’s 50 most trustworthy financial companies in 2015.

Furthermore, Primerica has marketing agreements with various companies. They market Citicorp Trust Bank debt elimination loans, MetLife’s Variable Annuities, ING 401 (k), Genworth Financials Long Term Care, Legg Mason Partners, Oppenheimer, American Fund, Van Kampen Investment, and Invesco, and so on.

However, some people are not interested in Primerica because it is a pyramid scheme, multi-level marketing, and other reasons. Many people find that the problem with multi-level marketing is that many of them coerce and pressure people to join. Training is also required for new agents to get a legal license. The company charges a $25 monthly fee to work for them (being part of Primerica) and $99 for registration. Most money is made from recruiting new people rather than selling products, and it is difficult to make much money if you do not recruit a many of people. That is how they stay in business. In fact, they make money by hiring on people below them; they get a cut of whatever they make. So clearly, it is each representative’s advantage to have people under him/her who are producing, so they can get that passive income. Nevertheless, it is difficult to be successful unless there are a wide network of friends and family members to sell to.

Moreover, on May 06, 2015 in Duluth, GA, Primerica (NYSE:PRI) announced financial results for the quarter ended March 31, 2015. Total revenues were $345.1 million in the first quarter of 2015 and net income was $43.4 million, or $0.82 per diluted share. The return on equity (ROE) of Primerica was 16.14 % for the quarter that in June 2015. In comparison, the quarterly net profit margin for Primerica is 14.01 % as of June 30, 2015. To compare P/E ratio with other companies, their P/E ratio is $47.87 as of Oct 9, 2015. 

Finally, Primerica makes large sums of money, but some people prefer to work for other companies that are not pyramid schemes or multi-level marketing for finance. However, Primerica is definitely beneficial to many families. They help families earn income and become properly protected. In fact, many families in the U.S are not fully protected due to high costs and not enough income. For this reason, a business that was formerly A.L Williams & Associates started in February 10, 1977 by A.L Williams was more than a job. It is a contractor business that was launched to earn extra income and to help families be protected properly and get it out of debt.

Works Cited

“Arthur L. Williams, Jr.” Wikipedia. n.p., n.p., October 6, 2015.

“Our History.” Primerica. n.p., n.p., October 6, 2015.

“Our Story.” Primerica. n.p., n.p.s October 6, 2015.

“Term Life Insurance.” Primerica. n.p., n.p., October 6, 2015.

Dill, Kathryn. “America's 50 Most Trustworthy Financial Companies.” Forbes. Forbes Staff, August 03, 2015. October 6, 2015.

Hancock, Keith. “Primerica Reports First Quarter 2015 Results.” Businesswire. Primerica Media, May 06, 2015. October 6, 2015

Saporta, Maria. “Art Williams Magic Back To Primerica.” Primerica. Atlanta Business Chronicle, June 24, 2011. October 6, 2015.

“Our Market.” Primericabusinessopportunity. n.p., n.p., October 6, 2015.

“The Future.” Primericabusinessopportunity. n.p., n.p., October 6, 2015.