Premier Business Magazine, Fall 2007
For over 30 years Primerica has helped deliver sound financial solutions to more than 6 million clients. Here are some of their stories.
A recent CBS News.com story stated that, "Americans once again spent everything they made and then some last year, pushing the personal savings rate to the lowest level since the Great Depression more than seven decades ago.... The only time our savings rate has dipped into negative numbers and stayed there for the entire year is 2005, 2006 and in 1932 and 1933." Will it take another crash for people to wake up and realize that something must be done to reverse this trend?
The lessons of the Depression forced families to prioritize their finances, to establish want vs. need. Financial security became the biggest priority and saving money was a necessity, not an option. "My parents were children of the Depression and were very security conscious," says John Addison, Primerica Co-CEO. "Even though they didn't make a lot of money, they ended up financially independent because they were very frugal people and learned the value of money."
Today, many people have lost complete sight of the value of a dollar. With easy access to consumer credit to help supplement their lifestyle, the average middle-income family is getting deeper and deeper into debt, desperately looking for a way out. But surprisingly, very few financial services companies today are in the "financial education" business when it comes to the middle-income market. "If you don't have a minimum of $200,000, you are not worth their time," Addison says. "It doesn't work with their business model."
When it comes to finances, how much do you know? If you're like most people, you probably know little about personal finance. Perhaps you think long-term security is impossible on your income. But, the truth is, no matter what your income level, you can achieve financial security. You just have to take the time to learn a few simple principles about how money works.
Financial Education for Everyone
Primerica is about education. They believe there are no "secrets" to financial security and financial education isn't just for the wealthy. Primerica's goal is to educate hardworking families on simple concepts that can change their financial future forever.
Wouldn't you like to find out where your finances really stand? And what you could do today to prepare for tomorrow? What if you could find this out for free? In just 30 minutes, a Financial Needs Analysis (FNA) presented by a Primerica representative can help you get answers to important questions like, "Am I saving enough for a secure retirement? Can I ever get out of debt? Do I have enough life insurance?" With information you supply, an FNA can give you personalized options to help you prepare for retirement. If you are like most people, you have no idea if you are on track for retirement. An FNA can show you where you are right now, offer a proposed amount of monthly savings needed, and predict how long your retirement savings could last.
Debt is the financial disease that can prevent you from achieving your goals and dreams. An FNA can show you how you can combine all of your debts into one lower monthly payment. You can also find out how to get out of debt years before you ever thought possible. The FNA can also show you how much life insurance is enough. You know you should have life insurance, but do you know how much you need? An FNA can show you how much is enough to protect your family should tragedy strike.
When Miracles Can Happen
For 30 years, Primerica representatives have been sitting down with people at their kitchen table to help them create a strategy that will allow them to not only get back on track, but chart a course toward financial security. Every month, the Primerica home office is flooded with testimonials of how the lives of average middle-income families are being changed just because they sat down with a Primerica representative. "When our representatives sit down face to face with a family who is at the end of their financial rope and help them prepare a strategy to get out of debt and protect their family while saving for the future, that's when miracles can happen," Addison says.
P.J. & Aya Omedillo Miami, Florida
“We kept asking ourselves, ‘where did the money go?”
P.J. and Aya Omedillo of Miami are typical of those who thought they were living the American Dream. P.J. was a successful civil engineer who was in charge of $20 million
in school projects for Broward County; Aya was an IT professional. Together, they made $120,000, a more-than-comfortable income by any standards. Yet they found themselves strapped with $68,000 in credit card debt. "We had two good salaries and still somehow managed to get into a financial quagmire," P.J. says. "We kept asking ourselves, `where did the money go?"'
In 2000, a friend introduced P.J. and Aya to Omar Oropesa, a Primerica representative, who sat down with them to help them with their financial situation. "Omar told us about financial options we never knew existed," says P.J., who was so impressed with what he learned that he became a representative. "Part of the reason I joined was for the financial education I needed to get our own financial life in order," he says. And that he did. With a $.M.A.R.T. debt-consolidation loan and the money he earned with his Primerica business, P.J. and Aya wiped out their $68,000 credit card debt and are well ahead of paying off their mortgage. They have a term life insurance policy to protect their growing family, and opened college savings plans for their children, Mia and Alec. In 2005, P.J. went full time with his Primerica business and is very close to reaching the Regional Vice President level.
The Theory of Decreasing Responsibility
The Theory of Decreasing Responsibility explains how your life insurance needs change over time. In the early years you need a lot of life insurance coverage. But in the later years you may not. In the early years, when you are younger, you don't have a lot of money. But in the later years, you better have money.
How does this fit with your insurance needs? Today when you're young, loss of income due to a premature death would be devastating. Your children are young and you might have high ' debt and a house mortgage. Your need for insurance is highest at this time. When you get older, retirement income is needed. Your children are grown, your debts are lower and your mortgage is paid. If you have savings, you are self-insured, diminishing your need for insurance. By having life insurance when your financial responsibilities are the greatest you can have peace of mind knowing your family's future is protected.
Ron & Kim Vanderwal Edmond, Oklahoma
“We consolidated all of our bills, all of our high-interest debt, freeing up $850 in our monthly budget. Primerica was our miracle.” Ron and Kim Vanderwal of Oklahoma were praying for an answer to their financial woes. Ron was a 50-year-old tennis pro with bad knees. Kim was a 47-year-old landscaper with a bad back. Like a lot of families, Ron and Kim were drowning in debt. A construction loan they got to build their home turned into a balloon note and minimum payments on their credit cards had doubled. "We were in trouble, with a capital T," says Ron. To make things worse, they discovered their cash-value life insurance policy, which they thought had $36,000 in it, only had $10,000.
When the couple met Primerica reps Jay and Lyndi Wright, it was an answer to their prayers. They were so impressed with their presentation, Kim and Ron started the process of getting licensed to become representatives so they could help others the way Jay and Lyndi helped them. "We got busy doing the business, got licensed, and started helping families get the very thing that we needed so badly-financial education."
Ron and Kim are happy to report that since closing on their $.M.A.R.T. consolidation loan in August 2005, they can finally see the light at the end of the tunnel. "We consolidated all of our bills, all of our high-interest debt, freeing up $850 in our monthly budget," Kim says. Plus, Ron now has triple the life insurance coverage with a Primerica Life term insurance policy for half the cost of their old whole life policy.
Primerica Is Making a Difference
- Paid $825-million in death claim benefits
- Helped clients invest $4.6 billion in mutual funds
- Consolidated $4.7 billion in consumer debt
Jacoby Smith Houston, Texas
“I really liked what I saw because they didn’t try to sell me something; they educated me.”
"Primerica was our miracle," Kim says. "But the real miracles out there are the families that we have been able to help. We have heard story upon story of families that were in the same shape or worse, whose lives have been transformed because of Primerica."
Jacoby Smith, father of four, works as a contractor for a large oil plant in Houston, Texas. Prior to discovering Primerica, he lived in a $30,000 home, had a poor credit score and was living paycheck to paycheck.
One day, he was involved in an accident at the plant where he worked. Because of his injuries, he received a settlement from the company. "The settlement was a blessing, but everyone tried to tell me what to do with the money," Jacoby says. Fortunately, a trusted friend referred him to Primerica representatives Todd Greer and Daina Sarafin.
Jacoby went to the appointment with an open mind. "I really liked what I saw because they educated me," Jacoby says. "I felt good about everything they said and they set me up on a program that would put my money to work for me."
Since then Jacoby has moved his family into a larger home, with every single payment being paid through the investments he set up with Primerica. "You can imagine the effect the regular payments are having on my credit score each month," Jacoby says. Over the last eight months his investments have grown to almost three times his annual income.
Jacoby can't thank Primerica enough for how that one appointment impacted his life forever. "For the first time in my life, I no longer live paycheck to paycheck," Jacoby says with a smile. "I see a bright future for my children and my entire family."
Insured: Police Officer, age 34 Charlotte, North Carolina
“We helped do something incredible for them.”
Before Primerica: $37,000 coverage After Primerica: $500,000 coverage
Primerica Regional Vice President Bill Mitchell met the client when she was still in school and working part time as a server at an area restaurant. She later got engaged and Mitchell attended the couple's wedding, where he recalls the nervous groom fainting at the altar. Not long after they were married, Mitchell met with the newlyweds to do their FNA.
The husband was employed as a maintenance worker for a realty company, but he had always wanted to be a policeman. The wife was working on getting her degree. The young couple did not know much about personal finance, but fortunately they were not carrying any significant debt. According to Mitchell, they owned a modest home and were diligently paying their $1,100 monthly mortgage payment, but they had not yet started to save for the future. The husband had $37,000 of group life insurance protection through his employer. Mitchell helped the couple apply for a policy with a death benefit of $500,000.
Mitchell's clients started a family soon thereafter and the husband joined the Charlotte police force. A few years went by and they moved into their dream home in suburban Charlotte. The wife was six months pregnant with their second child when a terrible tragedy struck the family. Her husband was on patrol on a Saturday evening when he and another officer were called to an apartment complex to investigate a possible domestic disturbance. All of a sudden, the two officers found themselves struggling in the parking lot with an armed suspect who shot both of them to death at close range.
Bill saw the news report on TV the following morning and immediately recognized his client's name. At the office, he verified his client's coverage and tried to contact the wife. Mitchell first spoke to her at the funeral, which was attended by an estimated 1,000 members of the community and police officers, who wore customary black bands over their badges to express their grief. In the long receiving line, the widow saw her Primerica representative and was relieved because she knew he was working to get the death benefit delivered. The fallen officer was honored with a 21-gun salute and a flyover by police helicopters. With the Primerica death benefit and other fund-raising support, the family has an abundance of financial stability.
According to Mitchell, "It feels unbelievable to know this woman and her children are set for life because of what we were able to do for them:" The family's second child is due this summer, "and it's sad that little baby will never know his dad, but he and his mom and his older brother will be taken care of financially. We helped do something incredible for them."