What Should You Know Before Joining a Life Insurance MLM?

"Other opportunity, do you know that's going to pay a 21-year-old half a million dollars?" "What type of mother are you? Your son's not going to college. Your son's doing that pyramid thing, huh?" "Hey, I drive the Lamborghini. Mama don't have to worry about money no more, because I know my purpose. Don't you let nobody steal your dream."

This is the dream that get shared by the likes of companies like Primerica, PHP and World Financial Group. You've probably even heard well-known public figures such as Patrick Bet-David, Ed Mylett, and even Marshall Faulk, a Super Bowl MVP and NFL Hall of Famer, promote them. I even had Marshall Faulk tactically try and recruit me. "Dominic, what's up, man? It's Marshall Faulk, fellow NFL. Just want to let you know that Transamerica is where you want to be, man. This is the place you want to be if you want to do anything big."

But if well-known influencers tell us how amazing it is and others constantly share how they have hundreds and made millions of dollars, then why is the overall sentiment in the space so negative? Even WFG itself feels the need to justify that they are a legitimate company. They have an entire page asking the question: is WFG a legitimate business?

Have you ever had a friend reach out to you that you have talk to forever and have him ask how are you doing, then within seconds proceed to tell you about an opportunity that will change your life? Or maybe you were like this guy who was thinking he was building relationship with someone just to find out he was being used to join a company. Well for me, I know this story too well. Hi, my name is Dom Ruane and this is me 11 years ago. I was a 19-year-old naive kid chasing my dream of playing in the NFL. This was also the time where I got the taste of what it was like to enter the world of MLMs, or as some people call it, a pyramid scheme.

I got the text like many others have. "Hey, what are you doing tomorrow?" "7:00 p.m., nothing. Why?" "I can't tell you, it would ruin it for you if I told you." So like many people in the world, I went, as I was intrigued. I walked into a room full of food and drinks and it was like a party. It wasn't until it was too late that I learned was actually like a cult. But hey, who doesn't want to be part of a cult?

So after the presenter shared that I could make tons of money passively while traveling, I joined. For 2 years I drank the Kool-Aid. I mass texted everyone in my phone the same script lines that were used on me. I talked to everyone I came in contact with and gave my business card to innocent shoppers at Target, Home Depot in the gym, all with the intention of recruiting them to join my team. I just knew I was going to be a millionaire in the next 3 months.

At the same time, I would cut out anyone who didn't want to join and became best friends with everyone who did. I learned how to win friends and influence people real quick. After several years of obsessive work and building a team of 300 plus people, the truth was, though, I was traveling across the country to huge events selling the dream to everyone that they were going to live a life of financial freedom, when in reality I hadn't made any money. It eventually all came crashing down, and with thousands of my money lost, the company eventually went under. The silver lining in it all is that my mistakes became lessons. I joined a scam so you don't have to.

But like any good story, this was just the beginning. 6 years after an opportunity in NFL with the Atlanta Falcons and playing rugby for Team USA, I received a message in my LinkedIn DMs. "Hey Dominic, thanks for connecting. I love connecting to guys like you because you seem like a hustler. Anybody who can do door-to-door sales is aces in my book. I'm not sure how we might be able to help each other, but let me know if you would be up for coffee."

I told myself after my first rodeo with an MLM I would never get involved with another one again, ever, ever again. So I obviously had my concerns that the message was MLM related, but I gave it the benefit of the doubt. I showed up, had coffee, and sure enough, I got invited to another presentation. It was a room of 30 people and a guy that was treated like a king presented on the state of the economy, compound interest, the savings crisis, and how as a society are lacking financial literacy. Basically, we're all royally screwed.

By this time I was already in the financial industry, but I was open to new collaborations, and after the presentation, I didn't know it was actually an MLM. I just thought it was another financial services company, and its name was World Financial Group. Unfortunately afterwards I said yes, paid the $100 and filled out the application. The last thing I had to do was sign when I got home. Before signing, I decided to go home and do what any sane person would do and go to Google, just to make sure I was making the right decision.

I typed in World Financial Group and sure enough, there it was: is WFG a pyramid scheme, WFG complaints, is WFG a scam. I instantly said, oh no, not again. As you can imagine, I never signed the final document, but instantly became inundated with the culture, group updates, compensation structure, financial products and the way they operated. I even learned Ed Mylett himself started his career and made his early stages of his fortune being an agent.

As I continued my research, I learned that WFG wasn't the only one. I got another DM asking me to join Primerica, so I decided to Google Primerica, and well, as you can imagine, even before I even finished what I was going to type, the very next thing that came up was scam. And then shortly after that I got another DM and it was from a company named PHP, which was started by Patrick Bet-David. Before I knew it, I was constantly getting messages after messages of people DMing me from these three companies. The irony though is once I asked, are you part of these companies, or I shared I'm just not interested, did I never heard from them ever again.

So I became curious: how does everyone else really feel about these companies? I obviously had a hunch for my preliminary research, but I wanted to know more, and here's what I found. People saw these MLM companies as worse than the real Bernie Madoff of pyramid schemes, and he stole billions.

...of billions of dollars from people. People felt that robbing a bank was more ethical than these companies. I found people made skits around the aggressiveness of their recruiting model. "I already got a job." "It's not a scheme." "I already got a job." "Financial freedom, it's financial freedom." And the comment section shared the same sentiment.

Even the people that work there believe it is very cult-like. The amount of people that thought it was a scam was crazy. "I ended up being in Amway LTD for two and a half years, and in that time I only sponsored one person. I lost about $118,000." "Roll thumb, if the company you are applying for or interviewing with can't tell you what their business does in plain English, it's probably a scam."

As I was doing my research, I even found somebody trying to expose Patrick Bet-David, and then I saw someone in the comments even share, hey, Patrick doesn't even talk about it on his channel, so that should be a red flag in itself. But then I found that to not be completely true, because then I saw this interview with Patrick Bet-David and Coffeezilla. Patrick did talk about PHP on his channel. "This is your way to get to the top of the compensation plan within PHP. So that right there, with everything I covered with you, is 23 different ways we get paid."

"This goes to where I think it's deceptive advertising. You have pitches going out to people who want to get involved with PHP that say it is easy to make this money, and by your num..." "Absolutely not easy to make money. I've never said it's easy. If I have, if you knew me long enough, you would know I talk about that this is a challenging industry to be a part of." Then Coffee shows a video where Bet-David shares how it is easy to make 100K per year. "Second, you can say, you know what, I make 60 grand on my job, I can easily make $100,000 a year with this and I can do it on my own time as a business owner."

So what can we gather from all this so far? One, the industry of MLM, including PHP, Primerica and WFG, is misleading. The message is you can make six figures easily, escape your 9-5 and live the life of your dreams. But in reality, statistically, only .05% of all people make six figures in the industry. So what it really comes down to is the famous quote: two things that can destroy any relationship, unrealistic expectations and poor communication.

People don't like to be misled. If one thing is shared but they experience something completely different, they feel scammed, bamboozled, embarrassed or mistreated. Another huge issue that Patrick even says himself, when you allow anybody and everybody to get into a company, you're opening up the floodgates to attract the wrong kind of people. There is no filtering system. Essentially, when you have thousands of people in unorganized chaos, you get people that mislead and are driven by greed.

And because of PHP, WFG and Primerica's model, this is exactly what happens. You get less than 1% that do things right, and the other 99% are running around burning the entire village down. Many rogue agents and many rogue distributors do make great companies look terrible. This is currently happening with the concept of infinite banking right now. A bunch of bad apples on TikTok and IG are making the entire concept get a bad rep.

The next major issue is we are talking about the financial services industry. A regulated industry requires licenses and real deep education to help people. This is people's livelihoods that we are dealing with. And what PHP, WFG and Primerica have done is taking a business model meant for part-time people and integrated it with a very full-time specialized space. "There's a lot of people that are experienced that don't know anything about life insurance." So true. "How in the world are you getting someone off the street and they're able to do this?"

And I just think of it this way. You have over 200,000 agents between these three companies. Because the model is so focused on recruiting, the 200,000 agents go all in on recruiting and forget they need to understand how money actually works. When you are new to something so specialized, you can't learn how to recruit and understand financial education simultaneously and become world class at it. Because of the business model, it is incentivized to build a team versus truly helping clients. Therefore, a lack of understanding of these financial products by these agents is so alarming, it's truly scary.

Here's an interview of a woman who works for Primerica talking about life insurance. "The death benefit, yeah, like if you died before that you wouldn't get paid out on the policy." That's what they're teaching people. That's so funny, they don't even know what they're talking. They sound like an idiot. Hey girl, I'm saying that with whole life insurance you can either receive the payout of the death benefit whenever you pass away, or you can also receive the death benefit and the cash value. It just depends on the type of policy that they have insurance.

Outside of being so recruiter heavy and not fully understanding these financial products, these three companies are also very product driven versus end result and how they do financial planning. WFG promotes IULs as the best product for everyone without fully understanding how this product works and understanding the management on the back end. I am not completely knocking IUL, but it is a very complex product, and when you have thousands of people promoting one of the most advanced insurance products on the marketplace, that actually terrifies me. And then we wonder why insurance gets such a bad rep.

And then from a product perspective, you have Primerica that says buy term and invest the difference is the one-stop shop for everyone. And then what they do is then they try to educate people on permanent products like the woman in the voice message, but they don't understand the products. I believe buy term and invest the difference is a valuable strategy, but it isn't a one-size-fits-all. Try and tell Elon Musk to do that. Now that is an extreme example, but it gets the point across. They love Dave Ramsey, so it makes sense.

Because there are application costs, licensing costs, cost to get started and membership cost, and most people who get started are already struggling financially, in the end they end up getting burned. Most people end up getting started with recruiting their friends and family, barely making any money, if any at all, then realize the industry is one of the hardest industries in the world to make money in, and then they leave, while their upline makes the majority of the income from their friends and family and gets the renewals indefinitely. So what ends up

Happening is people 90% of the time lose more money than they leave with and call it a scam. Also, even for the people that do focus on selling the financial products and do make money, the compensation levels are beyond low relative to what is available in the marketplace. I've seen anywhere from 30 to 50% for people getting started when you can go directly to the carrier and get over 100%. That is one third of the commissions you are losing because you have to share it for the education and with your upline.

This is important. The last thing that I will say is I am not here to sway someone away from these companies. I just want to share the facts. There are some good apples and a lot of bad. The industry gets a bad wrap, rightfully so, with the MLM and the insurance side.

Your friends and family will likely judge you for trying to recruit them and being in what people consider a pyramid scheme. You will meet a lot of people who will love you as you are part of their team, that then you will likely never hear from ever again if you leave. But if you work hard, take the time to really learn, have a mentor who really knows what is going on, and go all out, you could make good money. But from what I can see, there are much better ways to go about it and make even more money and help even more people the right way. But that is my opinion. Everyone has their own, and that is okay.

My encouragement though is if you choose to go down this path, treat it like a real business. Be transparent and ethical. Understand the risks, and don't be afraid to tell people what you do and who you work for. If you are afraid to share the names of the companies, you should not be representing them.

"Can I ask you what the company is, Gary, that you're in?" "Well, I don't know if I could do that legally, you know, without my compliance department chew my ass out." I don't think the compliance department would have an issue with you saying, "Hey, I've been with a company for 33 years and it changed my life." If anything, that's a good thing.

Ultimately, it's your decision on whether or not you want to go down this path, as I would never do so, but I hope you learned something from my story and the countless others who have been hurt by MLM. Feel free to share your story and experience with one of these companies or any MLM on how you have been impacted, whether positive or negative. It's important that people understand what they are getting into. Thanks for watching, and we'll see you next time.