Is Life Insurance is not a Pyramid Scheme. Life insurance is not a Ponzi scheme. Life insurance is not a multi-level marketing pyramid, although it can be sold like one via marketing multi-level distribution channel. It’s built on the actuarial premise of the law of large numbers. The statistical odds of everyone covered with life insurance dying at the same time are too great to calculate. Bottom line it is one of the great societal financial products of the last 300 years.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Is life insurance a pyramid scheme? Life insurance itself is not a pyramid scheme or any scheme. Life insurance has a long history and has been called many things over the years, usually by those who have something to sell as an alternative or those who can't afford to purchase so making it out to be villainous is easier to say than I can't afford it.
The only pyramid scheme things I would associate with life insurance is how some marketing groups operate with how they work their agency system. That is not insurance's fault, they could do it with feather dusters. It would be someone using insurance to take advantage of other agents, not customers.
Life insurance is not a pyramid scheme. You cannot get a lower premium on your policy by referring others to purchase life insurance. You cannot earn income on the backs of others who have purchased life insurance through your referral. The entire life insurance industry is highly regulated and practices like that are illegal with grave consequences to agents who would attempt to use them.
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The only pyramid scheme things I would associate with life insurance is how some marketing groups operate with how they work their agency system. That is not insurance's fault, they could do it with feather dusters. It would be someone using insurance to take advantage of other agents, not customers.