Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent Benji Carr

UPDATED: Apr 9, 2022

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The Facts of Life

  • Pyramid schemes, scams, and MLM companies aren’t always the same thing
  • Primerica uses multi-level marketing for insurance sales, which can lead to higher rates
  • Even though Primerica is legit, you will likely find better options elsewhere

Choosing a life insurance company can be a daunting task. There are so many different life insurance companies that it can be hard to determine which one is best for you and your family. When presented with the option of securing your life insurance policy through Primerica, many people ask, “Is Primerica a pyramid scheme?” Primerica is a well-established business that has been offering term life insurance for over 40 years.

Still, the question “Is Primerica a pyramid scheme?” does not have a simple answer. Read on to learn more about this company and how its business model works to understand if Primerica is a pyramid scheme or legit insurance that is right for you. It is crucial to explore your options, so enter your ZIP code to compare quotes from top life insurance companies that are not pyramid schemes for free.

Is Primerica a pyramid scheme?

Due to their unique business model, it is understandable to mistakenly think Primerica is a pyramid scheme. The critical difference between network marketing and a pyramid scheme comes down to the products and services they offer. 

A pyramid scheme is usually an illicit activity in which recruiters urge participants to invest money with a promise of high returns. Investors recruit others and collect a percentage of their investments, which builds a high profit for individuals at the top of the pyramid. There is rarely a fulfillment of goods and services, and the upfront cost can be astronomical.

A pyramid scheme is usually an illicit activity in which recruiters urge participants to invest money with a promise of high returns.

Primerica does require an upfront investment of $99 for a background check and ongoing payments of $25 per month for access to marketing tools. The difference here is that the recruiters do not collect a percentage of these initial investments. The commission structure relies on gathering a portion of the sale of insurance and financial products. Primerica representatives collect commissions on both their sales and the sales of those they have recruited.

There are so many pyramid schemes on the internet today that it is understandable to be hesitant about working with a company that employs a multi-level sales structure. Despite being a genuine and legitimate business, this structure can lead to more expensive products for the end customer. 

Imagine that your life insurance representative must take a cut of the rates for themselves, and a portion must go to 11 representatives who are directly above them. That is how Primerica operates, and this configuration leads to a higher upfront cost than a traditional company structure. By choosing one of the best life insurance companies, you can find more competitive pricing without being wary of overt upselling.

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Is Primerica a scam?

When asking if Primerica is a scam, it’s helpful to start with the definition of the word scam. A scam is a fraudulent activity or game used to make a quick buck by employing tactics that are usually illegal. According to this definition, Primerica is not a scam. Instead, Primerica is a legitimate business created by A.L. Williams in 1977. It would be incredibly challenging for an actual scam to persist for forty years.

A scam is a fraudulent activity or game used to make a quick buck by employing tactics that are usually illegal.

Network marketing can encourage dishonest sales tactics and egregious overcharging despite not being a scam. Primerica is under investigation for independent agents who took advantage of their customers through misleading claims. Top life insurance companies have much more oversight governing how their products can be advertised and sold.

Average Monthly Life Insurance Rates for $500,000 Coverage

  • Banner Life: $59
  • Pacific Life: $59
  • Protective Life: $59
  • Lincoln Financial: $60
  • Penn Mutual: $61
  • Prudential: $70
  • OneAmerica: $70
  • Bestow: $78
  • North Western Mutual: $79
  • New York Life: $85
  • Primerica: $89

Primerica is a fully accredited business that uses network marketing as its business foundation. The products and services offered are authentic and generally acceptable. Rates through Primerica are more expensive than popular alternatives, but this does not mean that Primerica is a scam.

Is Primerica an MLM?

Primerica is neither a scam nor a pyramid scheme, but a legitimate business that uses multi-level marketing as its sales foundation. Many multi-level marketing businesses are also scams or pyramid schemes, but that does not seem to be the case regarding Primerica’s legit business. 

Multi-level marketing, or network marketing, is a business model in which sales representatives recruit other salespeople and collect commissions on their own team’s sales. Many legitimate businesses operate using the MLM structure, especially in the insurance and financial industry.

Multi-level marketing, or network marketing, is a business model in which sales representatives recruit other salespeople and collect commissions on their own team’s sales.

As part of a multi-level marketing company, a representative’s primary focus is to sign more salespeople onto their team to make more significant commissions. Their training emphasizes recruitment over insurance sales. Representatives also frequently target friends and family members of their recruits using emotionally manipulative tactics.

Due to their goals, Primerica representatives are usually not as well-educated in the nuances of life insurance policies as traditional insurance company agents. When you have important questions about your policy, Primerica customer service may not be able to answer your questions sufficiently. This lack of guidance can lead to purchasing the wrong type of coverage that can leave you underinsured.

Is Primerica legit?

Primerica was officially established in 1980 after A.L. Williams Life Insurance Company (est. 1977) joined as insurance underwriter and PennCorp subsidiary Massachusetts Indemnity and Life Insurance Company. Primerica started offering the then less popular term life insurance as a more affordable alternative to whole life insurance. The company changed hands many times in the late 20th century and went on to become a part of the Citicorp group in 1998.


Primerica’s target demographic is middle-income Americans looking for life insurance and other insurance coverage, alongside financial services such as investing and debt consolidation. Primerica is a fully accredited business with an A+ rating from the Better Business Bureau and has been accredited since 1980. Primerica was also listed as one of “America’s 50 Most Trustworthy Financial Companies” by Forbes in 2015.

Despite being a legitimate company with high accreditation, Primerica has received nearly 140 customer complaints over the last three years. A large percentage of these complaints regard the products and services offered. There are some customers who are actually happy with their benefits through Primerica, so it all depends on your situation. Customer satisfaction aside, a closer look at rates in this Primerica review shows that it’s more expensive than most other top insurance companies. 

An additional challenge is that Primerica only offers term life insurance that customers must renew regularly. Each renewal carries a chance that Primerica may deny the policy due to pre-existing health conditions. Situations like these have led to quite a few different lawsuits putting Primerica under investigation. 

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What are the Primerica ratings?

So, does Primerica Life Insurance payout? 

Yes, their website even notes that they pay 94% of their claims within just two weeks. 

Plus, Primerica Life has an A+ rating from AM Best, which assesses an insurance company’s claims-paying ability and creditworthiness or how likely the company will default on its obligations. 

Letter ratings are assigned from AM Best insurance ratings that range from A++ as the best and D as the worst. 

What rider options do life insurance policies from Primerica include?

For its term life insurance coverage, Primerica offers three riders: an increasing benefit rider, a waiver of premium rider, and a child rider

To qualify for the increasing benefit rider, you must be aged 56 or younger and issued non-rated coverage. With the waiver of premium rider, you receive less of $400,000 or 70% of the face amount of the terminal illness benefit. A child rider is also available to cover all eligible children in your family.

Primerica: Pyramid scheme or legit insurance company?

There are so many options for choosing a life insurance company that you’re bound to have questions. You may have been wondering, “Is Primerica a pyramid scheme?” after a friend or loved one approached you to offer insurance options through Primerica.

After reading this article, you should feel confident understanding whether Primerica is a legitimate insurance company or a pyramid scheme scam. It is crucial to weigh your options when looking for a life insurance company so you can find the best rate for suitable coverage. Enter your ZIP code below to compare quotes from top life insurance companies for free without the pyramid scheme controversy.