Know about Prime America Life Insurance

Prime America Life Insurance (Primerica) is one of the foremost insurance companies in the United states and is generally credited for bringing a change in the way of thinking of the common man about insurance. The phrase “Buy term and invest the difference” was made popular by Prime America. The company was launched when the insurance industry was selling big on policies that combined coverage and investment options. The motto of Prime America has always been that investments and insurance are different and should be pursued separately, independent of each other. The company now stands as a success and serves many millions of its customers. Recently the company has diversified into other fields like loans, debt solutions, MF investments, annuities etc., but the primary business still remains its term life insurance policies.

Prime America Life Insurance also offers financial solutions for every body to optimize their financial position. Lets take a look some of the solutions.

Buy term and save the difference – This popular tagline has actually revolutionalized the insurance industry. Term insurance policies are extremely cheap when compared to whole life insurance and does provide adequate coverage for the insured. If one is ready to purchase a term insurance and invests the difference amount into his own investment options of choice, he/she has a better control and understanding of both insurance and investment. In theory, this type of differentiation and investment has to earn the insurer a lot more than a whole life policy in the long run. Whether it is true or not is debatable and there are many valid explanations for both but one fact that still remains true, is that the term insurance provides adequate coverage at extremely low costs.

Rule of 72 – This is one of the educational rule that is offered as an investment advice by Prime America Life Insurance company, to the public. The rule is simple. Divide number 72 with the interest rate that you are getting for your investment and the resultant number will be the number of years in which your investment doubles. Prime America has simplified a complex calculation method (which includes the derivation of the magical number – 72!) in such a way that enables all people to calculate their investment growth without any difficulty.

Theory of decreasing responsibility – The responsibilities of life gradually decline as age advances. When one is young, there are lot of responsibilities like mortgage, family, studies etc., whereas when one gets older, when all the children are grown up and educated, mortgages paid, savings accumulated…the responsibilities towards others are not that many. Prime America Life Insurance Company encourages you to purchase more insurance coverage when the responsibilities are more and lesser coverage as the person advances in age.

These simple to understand rules are meant to be educational to the customers and also encourage them to make the correct decisions while buying insurance. Compartmentalizing insurance coverages and investments separately, do have their merits. But, you would do better, if you have an understanding about other insurance policies and their benefits and merits too. The ideal way to optimize insurance coverage would be to buy an investment based policy and term policy (separately) and ensure that the total coverage is adequate to meet your (or family’s) needs.

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