Five Reasons Why Not to Buy Primerica Life Insurance

As stated on their corporate website: "Primerica's roots date back to 1977 when the company embarked on a revolutionary crusade to transform the life insurance industry. Primerica's "Buy Term and Invest the Difference" philosophy encourages middle-income families to purchase affordable term life insurance so they can have more money to invest in their family's future."

On the surface, this philosophy makes some sense, but if you dig a little deeper, there are five major pitfalls when dealing with a Primerica advisor.

1. Primerica employs a "one size fits all" philosophy. In many instances, term insurance may be the best solution, but what about when insurance protection is needed for the insured's lifetime? Examples of this include a child with a permanent disability, insurance needed to offset taxes on an investment property, or the transfer of a family business. Life insurance is not simply a commodity; if it was, there would be no need for a life insurance advisor. Careful analysis must be given to both the type and amount of coverage needed.

2. Primerica's term insurance policies are very expensive. At the time this article was written, a 50-year-old male non-smoker could get $200,000 of Term 10 coverage for $38.79 per month with Unity Life; the same coverage would cost $65.84 per month with Primerica. One reason for this is that Primerica uses a multi-level marketing distribution model – the independent brokerage model employed by other insurance companies has far fewer layers, which translates into a much more competitive cost structure. Primerica has improved it’s pricing in certain age brackets and is one of the few companies to offer 25 and 30 year Term policies.

3. Primerica's term policies are non-convertible, and since they do not offer a permanent life insurance policy in their product lineup, the insured would have to look elsewhere should a permanent policy be needed down the road. Furthermore, should the insured's health change, he/she would probably be out of luck.

4. Primerica is the only insurance company that encourages its advisors to work part-time. I wouldn't want a part-time accountant preparing my tax return and I wouldn't want a part-time lawyer preparing my will or a part-time doctor diagnosing me. The financial service industry is in a constant state of change – in order for an advisor to provide optimal customer service, they need to stay abreast of industry changes – meaning a full-time commitment to the business.

5. Primerica employs a captive sales force; their agents can only sell Primerica life insurance products. This places their agents in a compromising position – they are not able to shop the marketplace in order to provide their clients with the best possible value. Possible sale of Primerica

Citigroup was trying to sell Primerica in 2008 without success, having received several bids from life insurance companies and private equity companies interested in buying Primerica. At the time the market value of the company was estimated to be $7 billion, roughly 15 times its annual earning and Citi was trying to match various bidders in groups that could bid for the unit together. Initially, a sale to JC Flowers & Co. LLC and Protective Life Corp was underway until the deal was canceled last minute for publicly undisclosed reasons.

In May 2009 the Primerica executive team lead by co-CEOs John Addison and Rick Williams approached private equity firm J.C. Flowers & Co. yet again, as well as Blackstone Group LP and TPG Inc in a new attempt to have the company bought, a plan which Citigroup has not yet endorsed. Currently the company is estimated to be valued at $9 billion.

Important Disclosures from www.PrimericaCanada.ca

Primerica Primerica is the trade name of Primerica Canada, Inc. (United States) and of Primerica Canada (Canada) Ltd., PFSL Investments Canada Ltd. and Primerica Life Insurance Company of Canada.

Insurance, Securities & Other Financial Company Representation Appropriately licensed Primerica representatives are agents of certain affiliated Primerica Companies.

1. Term life insurance products and segregated funds are underwritten by Primerica Life Insurance Company of Canada, Head Office: Mississauga, Ontario. 2. To sell mutual funds Representatives must be sponsored by PFSL Investments Canada Ltd., Head Office: Mississauga, Ontario. 3. Representatives refer clients to Citicorp Home Mortgage, a division of CitiFinancial Canada Inc. for debt consolidation loans. Representatives should direct clients to CitiFinancial Canada Inc. for questions regarding debt consolidation. Primerica representatives are not mortgage brokers. They are prohibited by law from soliciting and giving advice on mortgages. 4. The Pre-Paid Legal Services program is provided by PPL Legal Care of Canada Corporation, a subsidiary of Pre- Paid Legal Service®, Inc. PPL Legal Care of Canada Corporation and Pre-Paid Legal Service®, Inc. are not related to Primerica Canada (Canada) Ltd. (PFSL). Representatives should direct clients to PPL Legal Care of Canada Corporation for questions regarding any legal services.

The products and services offered by the companies noted above may not be available in your province or territory. The products and services your Primerica representative may be able to offer also may be limited. Please consult your local Primerica office or your Primerica representative for a listing of products and services available.

Any indicated rates of return shown here are the historical annual compounded returns including changes in unit value and reinvestment of distributions and do not take into account sales, redemption, distribution or other optional charges or income taxes payable by any security holder that would have reduced returns or performance. Mutual fund securities are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that full amount your investment in the fund will be returned to you. Mutual funds are not guaranteed, their values changes frequently and past performance may not be repeated.

Subsidiary of Citigroup Primerica and its affiliates are subsidiaries of Citigroup Inc. Each subsidiary of Citigroup, and not Citigroup itself, is responsible for its obligations to its customers. Insurance and investments offered through Primerica Companies are not deposits. There is no bank guarantee. They are not CDIC insured. Investments may lose value. Financial Needs Analysis The Financial Needs Analysis (FNA) is designed to assist you in identifying your financial needs and goals so that you can make better informed decisions in managing your money. An FNA is developed based on information you provide, as summarized on data input pages, and on certain generally accepted assumptions and reasonable estimates. It is provided to you as a complimentary, no-obligation service by Primerica Canada. The FNA is not a financial plan. The FNA should be construed as a guide for you to use in deciding how best to attain your financial goals. Representatives are compensated through commissions or referral fees on the sale of financial products offered by the financial product companies they represent. Representatives are not financial planners, investment advisors, financial consultants or other specialists who provide financial advice and whose compensation may be unrelated to sales.

The Business Opportunity The Primerica business opportunity involves the sale of term life insurance and other financial services products such as mutual funds and individual variable annuity contracts (segregated funds). Representatives can refer you to CitiFinancial Canada, Inc. for debt consolidation loans. Primerica representatives are independent contractors, not employees of Primerica or its parent company Citigroup.

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