I receive lots of emails about Primerica also referred to as Prime America. I get questions wondering why they don’t sell permanent insurance? Mostly I get calls from Primerica policy holders asking why their rates have increased and can I help them find a more affordable fixed price. My job as an independent life insurance broker is to educate consumers to empower them to make smart buying choices. If I help you learn all your options and help you compare a bunch of companies and shop different prices, usually I can help you achieve your goals of protecting those that would suffer because of your early demise or the business that requires your protection. So a question a client asked me today was, “Is Primerica Life Insurance Good or Bad?”
Primerica Life Insurance in general is good: Primerica or Prime America as many have come to call them, is a strong successful American business and success story. They all types financial products including investments like securities. They do sell life insurance but it doesn’t seem to be their top priority when soliciting a client for business. Prime America or Primerica makes lots of their money on managing assets and their business model is to sell you term life insurance and invest the difference. The theory is a sound one and many advisers believe in this theory. A black and white theory is not good for all people and all situations. Many consumers over the age of 50 want to buy enough permanent life insurance for burial purposes, or final expenses. Well, Primerica or Prime America cant help you because they do not sell permanent coverage. And the perfect example is Primerica does not offer term conversions into permanent products. So lets say your mom bought a 20 yr Prime America term at age 50, which was a decent deal at the time. But as she is approaching 69 her health has deteriorated to the point that she is un-insurable to go out and buy a new policy, but its important to her to own $10-30,000 of permanent life insurance to pay for her funeral.
Term Conversions is very important rider: If your mom searches very carefully in her Primerica or Prime America term life insurance policy for a Rider to convert to a permanent product, she wont find it. Almost every reputable life insurance company in the USA offers this free built in rider that allows a consumer to convert their term policy into something permanent without proof of insurability, although her current policy nor any other Primerica policy offers conversions to permanent products. You can read more about term conversions here.
ART or Annual Renewable Term: When a Primerica or Prime America policy expires from the level term guaranteed price the policy changes ( if the insured doesn’t authorize a change) into an ART which is not a fixed level premium. The prices increase annually. The client might receive a letter in the mail explaining their might be options, but more times than not when I receive a call, the client is confused and upset at the process. When a level term plan expires options are:
1. The insured elects no changes and Primerica automatically changes the plan to a renewable policy with an increasing premium.
2. The client can apply for new coverage with a new exam and new underwriting requirements and if found healthy will be able to save money and lock in a price for another fixed period.
3. Cancel and go to another company with better pricing, better options moving forward ie. conversion right to a permanent product.
If you own Prime America or Primerica life insurance and or you are considering it, please shop and compare rates with an independent life insurance broker who will help you find the best deal!