Primerica Life Insurance Company Review


The Primerica Life Insurance Company is an Atlanta-area life insurance company based in Duluth, GA. The company was founded in 1977 by insurance executive Arthur L. Williams, Jr. It was initially known as A.L. Williams & Associates; the company adopted the Primerica Life Insurance name in 1991.

The company also owns a subsidiary insurance-affiliated securities broker-dealer, PFS Investments Inc. 18,000 of the company’s licensed insurance agents are registered with the broker-dealer. 2,900 of Primerica Life Insurance’s registered representatives are investment advisers. They offer investment advice on a fee basis.

Company Products

The company offers term insurance, financial services, annuities, mutual funds, and other financial products. Products are sold through its multi-level network of over 100,000 agents throughout North America. Primerica offers pre-paid legal services through its subsidiary Pre-Paid Legal Services, Inc. (PPLSI). Long-term care insurance is offered through Genworth Financial.

Auto and home insurance protection is available by Primerica Life Insurance agents through referral to Answer Financial, Inc. Answer is one of the largest auto and home insurance agencies in the U.S. Investment and securities products offered including mutual funds, variable annuities, individual retirement accounts, and group defined contribution plans (i.e. 401k 403b). These offerings are through agents of Primerica who are registered representatives of PFS Investments Inc.

Company History

A.L. Williams & Associates built its business on the premise of “buy term, invest the difference.” The company brings life insurance protection and investment products to middle-market consumers in the U.S. The company created a relationship with Massachusetts Indemnity and Life Insurance Company (MILICO) for risk underwriting purposes in 1980 and in 1981, A.L. Williams & Associates formed the A.L. Williams Corporation (ALWC). ALWC, under its initials, went public in 1982, listed over-the-counter before its move to a Nasdaq exchange listing in 1983 under the symbol “ALWC.”

The company became a part of Citigroup’s consumer financial services company, Citibank, in 1989 through its acquisition by the American Can Company. American Can became Primerica Corporation in March of 1987. ALWC was a subsidiary to Primerica as Primerica Life Insurance, along with Traveler’s Insurance and Smith Barney. Citibank sold its interest in Primerica via an initial public offering valued at $15 per share or $320 million in April 2010.

Company Financials and Ratings

The company reports in its most recent 10-K (annual) filing with the U.S. Securities & Exchange Commission. The company revenues are $1.52 billion and net income of $219.4 million for 2016. Insurance premiums and commissions from sales of term insurance totaled $1.38 billion in 2016. This represents 91 percent of the company’s earnings. The company paid dividends of $0.70 per share to its shareholders in 2016.

Primerica Life Insurance Company has a financial and credit rating from A.M. Best of A+. This gives the company a superior financial strength. The long-term credit rating for the company is slightly lower at aa-, which is stable. This rating is an improvement from the company’s previous “under review” status in 2010. This review was from a series of complaints and reviews of the company’s sales practices.

Consumer Complaints Against the Company

The company has been the subject of customer complaints, according to information provided by both the Better Business Bureau (BBB), Consumer Affairs, Consumer Financial Protection Bureau, a consumer watchdog agency of the federal government, and other agencies. Many of the complaints received against the company focus on slow/non-payment of death claims when presented as well as deceptive recruitment practices when recruiting potential sales agents.

The agency building model for Primerica is premise on recruiting pyramids or multi-level marketing (MLM). MLM focuses not as much on sales as it does recruiting a team of producers (agents) underneath, who also engage in recruiting a network of producers. This emphasis on recruiting means that many agents fail to make it to their second year, resulting in a large amount of orphan clients left without a direct servicing agent or contact in the event of a claim, policy questions, or other service inquiries.

Other Consumer Life Insurance Options

The company’s mantra, “Buy Term, Invest the Difference,” (BTID) is also a constant source of complaints for the company. It is often expressed by many complainants that the cost of term insurance offered by Primerica Life Insurance agents is more expensive than comparable offerings from other insurers offering more than just term insurance. Similarly rated companies (A and A+) offer term insurance at rates that are far more competitive. This, with a shared frustration with the company’s claims experience, particularly when death occurs within the company’s two-year contestability period, should caution perspective customers to ask questions about the coverage they seek to purchase.

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