Primerica, the MLM Company Being Spun-Off From Citigroup

by louabbott on April 3, 2010

With the sale of Primerica by Citigroup comes a lot of attention to this Multilevel Marketing company.

This is a very thorough article by SFGate, though with an obvious anti-MLM bias…

Citigroup (C) has officially priced the IPO of its spinoff of Primerica.

At $15 per share, the pricing went strong.

Warburg Pincus will pick up 22% to 33% of shares and Citigroup will retain 32% to 46% of equity, which it will divest after Primerica begins trading.

But will investors buy Primerica’s stock?

That depends if they can figure out what Primerica actually does first.

What Does Primerica Do?

They’ll deny it, but basically, it’s a multi-level marketing (MLM) company for finance.

Primerica employs, according to their prospectus, over 100,000 representatives who go out and sell financial products like term life insurance, mutual funds, life insurance, and annuities. Almost all the products offered by Primerica are from Citigroup, its corporate parent.

All the mutual funds and annuities are sold through Primerica’s licensed broker/dealer subsidiary, PFS Investments.

The goal is for the rep to push these products in a “warm market,” which includes your family and friends who you’d be more comfortable selling to.

The rep receives a commission for these sales and his recruiter, recruiter’s recruiter and so on all receive a portion of the sale.

Reps are encouraged to recruit more people to continue bringing in sales and revenue. All this information can be found in the “Business” section of the prospectus, beginning on page 104.

But don’t expect to go making $100,000 a year as a salesperson.

According to Primerica, these 100,000 reps make on average, $5,156 a year. Hardly enough to do anything with let alone live on.

Higher ups who run district sales offices are called RVPs or regional vice presidents. They make significantly more money.

…How does one become a sales rep? Good question.

We spent several days calling local Primerica “offices,” which are just people’s apartments and homes and a cellphone number linked to that address. None of the numbers in Manhattan or Queens worked, so we called Mark Supic, Primerica’s Executive Vice President of Corporate Relations who works at the company’s headquarters in Duluth, Georgia.

Mr. Supic said he could not comment on anything due to the quiet period related to the IPO filing. So we asked Mr. Supic how we could go about finding a local sales representative. He told us to “look through the white pages or use MSN white pages.”

Financial Details

Whatever your opinion of Primerica, you can’t ignore that it’s a real company.

In 2009 alone Primerica did $2.22 billion in revenue. Here are some basic facts about the state of the company’s finances as found in the S-1 filing, page 14:

* Revenue in 2008 was $2.19 billion with net income of $167.6 million; 2007 saw revenue of $2.39 billion and net income of $593.6 million.
* Growth has essentially been flat over the past three years.
* Most of Primerica’s revenue is derived from direct premium payments.
* Term life insurance is Primerica’s best selling product.
* $300 million of revenue was drawn in 2009 from investment and savings products.
* 2009 saw sales commissions of $34.3 million.

Where Have All The Sales Reps Gone?

Unable to find a local sales representative to speak with, we hit the Internet and scoured around for first-hand accounts of Primerica.

This message on purporting to come from a company rep explains offers some first-hand perspective. He writes first hand detailing how Primerica’s compensation system works:

I could go on forever about my experience with Primerica. So instead of detailing conversations and experiences I will do what no one at my base shop, and no person to ever attack or defend Primerica, has done. I’m going to lay out some FACTS and hopefully these FACTS will ANSWER some QUESTIONS:

1. In the month of February 2007, Primerica recruited 16,500 people at $199 a piece. The $199 is supposed to be used for a background check, and the Group 1 Life/Health Licensing process. Any current or former representative will tell you that there is a “formula for success” in regards to recruits;

For every 10 people you recruit, 6 will quit and 4 will pursue their life license. Of the 4 that pursue 1 will fail the test and quit, 1 will pass the exam and never sell insurance, 1 will pass, do 2-3 transactions and quit and 1 will become a “success.” So, for every 10 recruits, 7 do nothing with the $199.

Let’s do a little bit of math for the month of February. 16,500 divided by 10 is 1650. There are 1650 groups of 10. According to the “formula of success” 7 out of the 10 will not use the $199 they paid. 1650 multiplied by 7 is 11,550 people who did not use their $199 fee for licensing. 11,550 times $199 is
$2,298,450. The goal for March is 30,000 recruits. 30,000 divided by 10 is 3000 times 7 is 21,000 times $199 is $4,179,000. In one month off of recruits alone Primerica made enough to pay the “guy on the CD who makes 2 Million Dollars a year” his money for the year and some change.

Can people get refunds? Absolutely. I am in the process of getting three of them right now. After the initial three to four days of processing your $199 loses $40 of value for background checks which actually only cost $20. The other $20 is said to be an administration fee. So in February, had everyone who didn’t go after their Group 1 Life/Health license received a refund of $150, Primerica still profited $20 times 11,550 or $213,000.

Recruit. Recruit. Recruit.

Primerica asks their reps for quite a bit. Becoming a Primerica rep requires you to pay a $199 (now $99) fee and highly recommends paying a $25-a-month fee for access to Primerica Online as noted on page 108 of the prospectus. 100,000 reps times $25 a month equals $2.5 million a month from its own employees.
Of course, Primerica has a response

When you visit, you’re greeted with a lack of information and no way to find a local representative in your area. Furthermore, a blog setup by the company at features a post with a video entitled “Primerica Scam: The Real Picture.” In this official blog post, Primerica attempts to defend itself by telling a sob story from the point of view of a current employee. The employee then speaks briefly in a video (embedded below) in which he talks about how Primerica is such a great “opportunity” and yet, never explains what the actual opportunity is.

To summarize, it must be said that we have no doubt Primerica is a legit business. Half a billion in net income is certainly nothing to scoff at either.

We shall see how investors feel once they procure an equity stake in the company when it trades under the NYSE ticker “PRI”.

Below, the full 300-page prospectus is below for your extended reading pleasure.

Read more:

For more about Primerica, see Related Posts below.

Be Sociable, Share!

{ 6 comments… read them below or add one }

Reva January 26, 2012 at 3:45 pm Thumb up 0 Thumb down 4

I’ve been with Primerica for about 4 months now. I made $4000 my first three months and I’m continuing to earn while I study and earn my securities licenses. I am looking forward to being able to go full time and quit teaching.


James June 29, 2012 at 8:50 am Thumb up 0 Thumb down 1

How did you make so much I’m in the process of getting my bonus and it seem every client I sit down with I can’t seem to help them there older and there set in there ways…can u give me any advice?


Skippy August 3, 2010 at 8:50 pm Thumb up 8 Thumb down 3

Primerica and religion (or cults) are very similiar, I know because I worked in the Duluth headquarters. As long as you “believe” you will be ok, the HQ employees that last are ones that do not question. It is actually a very christian based group of employees, a business like this, like a church, is built around people that promote the “gospel” and bring in other similar minded people as a base. It is a self fulfilling prophecy, but if you look at the numbers for the last 15 years they do no grow much, they have a natural attrition rate almost as high as recruitment rate. Very little expansion markets left. There are very few “agents” that last more than 1-2 or even 5 years. The ones that have, have been around since the beginning and are at the top of the cash pyramid. Money flows uphill here, not down. They make money selling the business support products an agent buys like marketing materials and software fees. This business does not NEED to exist, that is the real litmus test.


Kendall Peterson May 21, 2010 at 10:41 am Thumb up 6 Thumb down 1

As a person who spent a decade as a stock broker including with a major wall street firm and a Swiss bank, my experience has been that most Primerica reps have their heart in the right place and truly want to help people, but they just don’t have the education or experience to do the best job for their clients.

When an RVP doesn’t know how much the IRA limit for the current year is, and its the month of June, one has to wonder. And that’s just one example I ran across. A Group One license ( or even a Series 6 License) does not make one qualified to advise someone on how to plan their financial future.

I’m a huge supporter of the networking industry, and have met a handful of Preimerica reps who have the background to be of service to their clients. I wish the company would take more time to train on financial matters.


Luis Maqueira April 28, 2010 at 8:03 pm Thumb up 2 Thumb down 7

“The sooner you go down any path, the sooner you’ll know what action to take.” for $ 99 you get the chance to learn about the Insurance industry, you get train on Sales and business.
Meet a lot of people empowered to do more with their lives..
you can’t go wrong.


Jim Widmann April 4, 2010 at 8:19 am Thumb up 4 Thumb down 8

the fee is now $99 dollars and with that Primerica provides study materials and pays licensing fees for all Life , Health, Securities,Home and Auto and soon NMLS Mortgage licensing.( do the math on that) for someone who says “This is a very thorough article by SFGate” I hope this is not an attempt at yet another failed career more like you had with Primerica. You should get a job were someone can keep an eye on you and keep you from messing up.
PS:I know this won’t get published the truth never does.


Leave a Comment

Thoughtful and constructive comments that benefit network marketing professionals and the industry will be accepted and published after review.
We will not publish rude or insulting comments, plugs for your company or product, or generally non-helpful or self-promoting content.

Previous post:

Next post: