Are any Dopers familiar with Primerica?

[robby]

@Cardinal

The good agents don’t. We didn’t. OTOH, our market was blue collar families who often weren’t doing any kind of investing other than the dad’s pension. I didn’t feel bad at all in getting them to set aside money in an account that was earning 5-7% a year. Literally, that money would have been video games otherwise.

By “OTOH”, are you stating that you did in fact sell whole life policies to the blue collar families in your market?

Anyway, the problem with whole life policies, as I understand it, is that the investment “account” isn’t really an account in any normal sense of the word. With whole life policies, if you die while the policy is in effect, you get the insurance payout only. The insurance company keeps the investment account. If I have a term policy and I die, my beneficiaries get the insurance payout along with any investment account I have.

@Cardinal

If you need a term policy, then get one. Primerica essentially says that everyone needs one. That’s just not true. If you are concerned about your health changing and being uninsurable later in life, then don’t get term. Also, consider how much hassle it will be if your widow is supposed to get a payout. What time frame will the check arrive in, etc?

I never took it that Primerica says that everyone needs a term policy. People with no dependents, for instance, generally don’t need any insurance. This applies to young adults as well as retirees. With respect to the latter, no retiree who prudently invested for their retirement should need to worry about whether they’re insurable later in life. Why does the average retiree need life insurance?

Again, the purpose of life insurance is to replace lost income due to the untimely death of a worker.

And if you’re concerned about whether your widow will get her beneficiary check in a timely manner, pick a reputable insurance company that sells a good term policy.

@Cardinal

I think you’ve been listening to Primerica a lot. It’s a regulated industry, it’s not a scam. You don’t want to pay the extra for the ability to extend your insurance later after you get cancer. Then don’t do it. But don’t call that ability worthless or a scam.

I haven’t listened to Primerica in over 12 years, and I still think whole life is a scam. And calling it a regulated industry is a joke. The industry made the rules, and its lobbyists ensure that well-needed reform is unlikely to occur. How much money did the insurance industry make last year, anyway?

Lastly, referring to your comments about “paying extra to extend your insurance after you get cancer,” there’s no reason that this couldn’t be accomplished under the auspices of a term policy, if someone was willing to pay higher term premiums for this benefit.

My beef is with mixing up “cash reserves” and “savings accounts” with life insurance. Life insurance is not that complicated of a concept. It’s the insurance companies and their agents who have complicated a simple concept with various flavors of “whole life,” “universal life,” and similar products. I’m convinced that the purpose of all this obfuscation is to enhance their bottom line at the expense of their clients.

[robby]

None of this is new, BTW, and Primerica didn’t invent the concept of “Buy cheaper term-insurance and invest the difference.”

This guy wrote a book back in 1963 (updated in 1989):
What’s Wrong With Your Life Insurance.

There’s several interesting reviews:

Here’s a good summary from one:

Let’s say you pay $250 per month for a whole life policy. It is pretty easy for an insurance company to structure that policy so that, over a 20 year period, it attains $60,000 in cash value…

But what if, instead of “investing” in a whole life policy, you bought an inexpensive level term policy and invested the difference yourself? A good mutual fund will easily return 11% per year on your money over the long term. If you bought a term policy for $50 per month, and invested the remainder of the $250 you would have put into a whole life policy each month into a mutual fund earning 11% instead, at the end of 20 years you would have six hundred thousand dollars, not sixty thousand.

Does that mean that if the insurance company that sold you the whole life policy invested your premiums into a mutual fund, that they paid you back $60,000, but would have pocketed $540,000 in investment earnings, without spending a dime of their own money? Yes, that is exactly what happens.

There’s another more recent review from some idiot scammer. He paints a dark picture of a hapless person who never gets around to investing anything, and tries to buy a term policy at age 60 to “leave something for his wife and kids.” What a bunch of B.S.! That what your investments are for, not life insurance! :rolleyes:

Once again, insurance is not supposed to be an investment!

I could go on all night, mentioning ridiculous stuff like whole life polices allowing you to borrow your own money (if you run into financial difficulty and need to tap into your cash value), and having to pay the insurance company interest on it–but I’m going to bed.

[T_SQUARE]

For what it’s worth: I’m very disappointed that the biggest bank in all the land runs ponzi schemes.

[pbbth]

Primerica = Cyberdyne

Remember, from the Terminator movies? From wiki: “Universal Studios Orlando and Universal Studios Hollywood have full size Cyberdyne Corporation lobbies for their ride T2 3-D: Battle Across Time where visitors are treated to a PR film by Cyberdyne extolling the virtues of the Skynet system and Cyberdyne’s other “security” oriented innovations and are often harassed by an impatient company hostess.”

That description could easily describe the Primerica meetings too. They held an hour long meeting in which I was never allowed to ask a single question and they showed this chipper, “we are so awesome” video about the wonders of Primerica. The entire time inside my head I was screaming “Cyberdyne! Oh my god it’s Cyberdyne!” I got up an left as soon as they stopped talking without even saying a word to anyone.