Premier Business Magazine, Fall 2007
Primerica’s mission succeeds through a two-pronged approach: financial education and financial solutions.
At its core, Primerica is more than just products. Primerica is about people. Their 100,000 licensed representatives are on a crusade to transform the lives of middle-income families. Primerica's mission succeeds through a two-pronged approach: financial education and financial solutions.
While most financial services companies focus primarily on high-income clients, or just push financial products, Primerica is different. Primerica's representatives work to help struggling middle-class families not only solve their financial problems, but also learn how they can avoid common financial pitfalls in the first place.
Primerica's personal approach to financial education begins at the kitchen table. Its representatives meet with families one-on-one, in the comfort and privacy of their own homes, to help them get a clear picture of where they stand and what they can do to improve their financial situation.
Primerica's key financial concepts address the problems most common to middle-income families: the wrong kind of insurance, not enough savings and too much debt. By taking time to educate its clients and teach them how money works, Primerica is helping families address their most serious financial problems — and find solutions.
It All Comes Together with the Financial Needs Analysis
Before offering a client a product, a Primerica representative will help them complete a Financial Needs Analysis (FNA). The FNA is a proprietary Primerica tool that gives a client a snapshot of where their finances are today and offers suggestions for what they can do to improve their financial situation. The FNA is complimentary, customized and confidential. By using the information provided on the FNA, Primerica representatives can offer a customized financial program for every client they serve.
The FNA addresses the three main targets for a well-rounded and comprehensive financial strategy: life insurance, savings and debt elimination.
The "Buy Term and Invest the Difference" Philosophy
Primerica's crusade began in 1977 with a mission to transform the life insurance industry. At that time, most life insurance agents sold cash-value life insurance, which is a classic example of bundling your life insurance and savings together. That means you would have to choose either protection or cash accumulation: you couldn't get both. If you live, which is most likely you can collect your cash value, but you may lose your life insurance if you receive your cash. Although some cash-value models — like variable universal life — allow cash withdrawals, the death benefit will most likely be reduced if you withdraw a significant amount.
"You buy life insurance for just one reason: to support the people who depend on your income if you die prematurely … You want term insurance." – Newsweek, Jan. 9, 2006
Primerica believes in 100 percent term insurance, 100 percent of the time, encouraging its clients to purchase inexpensive term insurance and invest the difference in savings and retirement. The "difference" means the savings in premium charges between term and cash-value life insurance. With this model, you have greater control over your benefits. Because protection and savings are separate, you can better control both the death benefit and the investment portion.
An idea that once seemed revolutionary, Primerica's "Buy Term and Invest the Difference" philosophy is now widely touted by financial professionals and personal finance magazines.
By encouraging clients to purchase affordable term life insurance. Primerica can focus on the next step in its well-rounded financial education approach: savings.
A Savings Plan for Every Stage of Life
After helping clients get the protection need at a price they can afford, Primerica shows them where those savings can best be used. Primerica helps families focus on savings strategies and understand why a solid savings game plan is essential for a secure future:
- Build an Emergency Savings Fund: Primerica recommends having at least three to six months of your monthly income saved for emergencies. Primerica's "pay yourself first" philosophy encourages having savings ready for life's surprises.
- Save for Short-Term Goals: Instead of putting vacations and other major purchases on a credit card, save for them and pay cash.
- Put Your Retirement Savings on Autopilot: Estimate how much money you will need to see yourself through your retirement years and put a program in place to save for your retirement goals. Instead of "timing the market," Primerica teaches clients that – "time in the market" is essential — and starting to save early for retirement is key.
- Save for a Child's Future: Put away savings for your child's college education.
Additionally, Primerica has securitieslicensed representatives who can help families take advantage of mutual funds to invest for the future. Families can set up automatic monthly investments into a Mutual fund for as little as $25 each month. That is much lower than the industry average, illustrating Primerica's appeal to investors who don't have large amounts to invest.
Primerica shows how purchasing affordable term insurance can free up money to save, but that's not the only "found money" source that Primerica shows clients how to tap into. By educating clients about how to eliminate debt from their lives, the financial education approach comes full circle.
Of all the threats to a client's financial security, none is more dangerous than debt. If a client is nearing a crisis point and their debt payments are consuming their disposable income, Primerica encourages clients to consider a debt consolidation loan.
With a debt consolidation loan, the lender pays off creditors and combines all the balance amounts into one loan with one fixed payment. Once a client has consolidated, they usually begin to make lower monthly payments. The client can then apply the extra money made available toward debt freedom and retirement savings. By consolidating bills, clients can get out of debt years before they ever thought possible and potentially save thousands of dollars.
A Full-Circle Approach to Financial Solutions
Primerica tackles the often-confusing, fragmented world of personal finance and makes everyday financial concepts easy for every family to understand. By showing clients how insurance, savings and debt elimination work together to form a total financial solution, Primerica takes the guesswork out of preparing for a brighter financial future.
This full-service approach of offering financial education and solutions sets Primerica apart from the competition — and gives their clients the financial education edge.
"To save money, buy term insurance." -USA Today, Oct. 10, 2006