Primerica Plans??......................

[toolbelt]

In 2015, they reported 2,403,713 policies in force at year end. In 2016, they report 2,489,493 policies in force at year end, after paying out on 14,600 policies, and selling 298,244 new policies during the year. It seems 183,264 policies simply disappeared. The net gain year over year in policies in force achieved by 116,827 reps amounted to 85,780 policies.

 

[Willie B]

Not all companies even offer whole life and yes not all term insurance is convertible. Some are really just term insurance and expire at a certain age.

Thank you. That is good to know.

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I just thought of this (sometimes I feel rather slow in this business), but if they only sell term, and not even convert to a cash value policy of any kind (which I thought they'd have something - even a non-par WL)... I wonder what their general investment account and policy reserves look like?

They may have a lot of reps, but their financials aren't that big:
A.M. Best's Consumer Insurance Information Center

Yes, they are an A+ rated company and yes, they'll pay claims... but only a size of $500 to $750 million in size... and if they only sell term, it must be "expensive" term in order to have a pool of money large enough to pay claims.

Of course, term insurance is actuarily designed to lapse and/or terminate before the insured dies, and the company gets to keep all the premiums previously paid into the policy. If you over-charge your term premiums compared to other companies OR sell an increasing premium term policy so it'll lapse faster... and do that long enough, and you'll have a sizeable general investment account to pay claims on the rare occasion that you need to do so.

While that's how all term works, at least the companies with cash value policies can built up their policy reserves for lifelong coverage and partnering with their insureds for competitive returns via index credits or dividend participation, along with non-forfeiture rights to access policy cash values in the event of emergency or opportunity.

Companies that ONLY offer term... well, I must question their ethical business practices. Just because something is legal, doesn't mean they aren't scamming people.

The first sketchy thing about primerica is that they instantly want you to recruit and sell to friends and family. There business model is clearly working, but like you said just cause something is legal doesn't mean it's right.

 

[VolAgent]

I just thought of this (sometimes I feel rather slow in this business), but if they only sell term, and not even convert to a cash value policy of any kind (which I thought they'd have something - even a non-par WL)... I wonder what their general investment account and policy reserves look like?

They may have a lot of reps, but their financials aren't that big:
A.M. Best's Consumer Insurance Information Center

Yes, they are an A+ rated company and yes, they'll pay claims... but only a size of $500 to $750 million in size... and if they only sell term, it must be "expensive" term in order to have a pool of money large enough to pay claims.

Of course, term insurance is actuarily designed to lapse and/or terminate before the insured dies, and the company gets to keep all the premiums previously paid into the policy. If you over-charge your term premiums compared to other companies OR sell an increasing premium term policy so it'll lapse faster... and do that long enough, and you'll have a sizeable general investment account to pay claims on the rare occasion that you need to do so.

While that's how all term works, at least the companies with cash value policies can built up their policy reserves for lifelong coverage and partnering with their insureds for competitive returns via index credits or dividend participation, along with non-forfeiture rights to access policy cash values in the event of emergency or opportunity.

Companies that ONLY offer term... well, I must question their ethical business practices. Just because something is legal, doesn't mean they aren't scamming people.

I really expected better from you. In no way is this a defense of Primerica.

You can reserve for term just as easy as for whole life. You don't have to overcharge, just properly price it based on underwriting and stick to your underwriting guidelines. Put enough business on the books and the numbers generally work out. With so many term policies lapsing or being replaced and no cash value to deal with, there is a lot of premium to retain. Also, the vast majority of companies have purchased reinsurance in some form or fashion.

As I recall, even Mass Mutual has reinsurance. I believe only NYL and Northwestern will place jumbo cases without reinsurance? They probably still have some type of stop-loss reinsurance in place just in case.