Is American Income Life a pyramid scheme? There are numerous reasons to be concerned, but technically, it’s an insurance company, not a pyramid scheme.
AIL, or more commonly known as American Income Life, is a Waco, Texas-based insurance company that started in 1951.
They have achieved the status they enjoy today because they specialize in providing supplemental health insurance to labor unions, credit unions, and associations.
This insurance company operates on an “Opportunity Unlimited’ compensation plan. This means that at American Income Life; you decide what you’re worth.
You have complete control as an independent contractor. Your performance determines how much money you earn and how far your career can progress.
In this guide, I’ll go over American Income Life’s business model and how much money you can make as an “independent contractor” insurance agent.
I will also discuss the various benefits and drawbacks of working for this insurance company and provide personal insight based on my experience with the company.
My goal is to inform you about American Income Life so that you can make an informed decision before you decide to join (AIL) American income life as an independent insurance agent.
This article is written by our Editorial Team at Incomepedia with the help of a former American Income Life independent contractor.
Table of Contents
My Personal Experience
My brief career with American Income Life began in May of 2020. Until then, I had worked as a shoe salesman for over twenty years of my life.
However, when Covid-19 started, the world came to an immediate halt. I still remember I went on the 10th march to my job, and on the 11th, everything was shut down.
At first, we were told to hang tight for two weeks, and everything would be back to normal. We were immediately furloughed from our jobs, which meant we weren’t getting paid, and getting through even those two weeks was hard. Because when you live paycheck to paycheck, life is hard!
Within those two weeks, I realized we’ve been in this Covid thing for a long time, and it wasn’t going away, as the president claimed on television. I asked people if they knew of any job openings.
My biggest problem was that I had no experience in anything else other than being an excellent shoe salesman. So I was unqualified for most jobs.
However, one day in May, my luck changed when a family friend of mine introduced me to American Income Life.
I was hesitant to work for an insurance company as I used to think all of them were pyramid schemes. However, when my friend told me that this company was clean, I was glad to know.
He had been working for them for a couple of years, so he told me that company was “you get paid for what you bring.”
This meant I wasn’t getting any salary, and my total income was commission based, but I was happy this was the case. In 20 years of my previous job, I had made a lot of regulars, so I started contacting them to sell insurance and earn.
Now Covid also helped me a lot in that time because people were afraid of dying; hence they were buying policies from me like hot cakes.
I did very well during the 3 months that I worked there. But as soon as things opened back, I left that job and returned to mine as fast as possible.
That job was fine, but it was lonely, and I’m a social butterfly. Hence, it just wasn’t for me. However, if you are interested in earning money and have the skillset to sell life insurance packages, then you can earn great in this job.
What is American Income Life?
American Income Life is a Texas-based insurance company. Since 1959, the company’s headquarters have been in Waco, Texas.
American Income Life is authorized to conduct business in 49 states of the USA, the District of Columbia, Canada, and New Zealand.
American Income Life also has two wholly owned subsidiaries: National Income Life Insurance Company, which is licensed in New York, and Union Heritage Life Assurance Company Limited, which is licensed in Ireland. Hence, making it a major player in the insurance industry.
This company primarily serves labor unions, credit unions, and associations by providing supplemental life and critical illness insurance.
American Income Life has over 2.5 million policyholders and generated over $273 million in insurance sales in 2021.
American income life works differently compared to other insurance companies. As in place of permanent fixed salaried sales agents, they hire “Independent contractors” to sell insurance of their life insurance policy.
What do they sell?
American Income Life offers four major categories of products: Life, Health, No-Cost Products, and Special Risk.
Life Insurance
Here is how the AIL talks about its product.
“It’s not about you. Life insurance is something you do to help protect those you love so they don’t suffer financially if your income is no longer there. Life insurance can be the only thing that stands between your loved ones and financial hardship.”
Other than that, they also mentioned their offerings for things like:
- Legacy Will Kit
- Head Start Program
- Final Expense Program
Accident and Supplemental Health Insurance
Below is a quick capture of the products that you will need to be selling. Take a look and see if this is for you.
No-Cost Products
You and your family can benefit from no-cost protection products offered by American Income Life.
This may be a good foot-in-the-door product.
Again, selling insurance is all about planting fears in the minds of your customers. A life-changing event, however small a chance, is enough to make your customer worried.
Special Risk
AIL Special Risk provides insurance designed to help cover children’s accident or illness coverage.
This specialty operation helps protect children and works closely with parents and organizations to reduce the risk of unpaid medical bills in the face of the unexpected.
When you choose this product then from underwriting to filing a claim, you’ll only work with one direct source, providing a simple, seamless process from beginning to end.
History
American Income Insurance Company was founded with a $25,000 loan in 1951 by company President Harold Goodman and his nephew, Bernard Rapoport.
In its first year of operation, the company earned $95,000 in premium. By 1953, the company’s premium had reached $1 million, and in 1954, the business was receiving 6,000 policy requests per month.
However, it reached another stratosphere in 1961, when AIL began selling to labor unions and offered features that other insurers were not offering, like waiving premiums during authorized strikes and developing a scholarship program for the children of union members.
Since then, the company has only gone from strength to strength. Plus, they are much more successful than other insurance companies because they utilize independent contractors to sell insurance for them.
This is possible because, unlike other insurance companies, they do not have to bear the expenses of hiring permanent staff or renting offices.
Their independent contractors are freelancers; they get a commission cut whenever they secure a sale. The rest is absorbed by American Income Life.
The American Income Life Company is sold for $563 million to Torchmark Corporation in 1994.
As of 2012, American Income Life Insurance Co. sued Google, Inc. and the unidentified owners of two websites for displaying unflattering results and reviews about the company on the first page of Google searches.
In 2013, AIL sold more than $130 million in products to over 2 million policyholders.
Thus, they generated $273 million from the sale of whole life insurance policies in 2021.
As part of a company-wide rebranding of the Torchmark Corporation, American Income Life became a subsidiary of Globe Life on August 8, 2019.
You can learn more about American Income Life’s history in the following Youtube video:
CEO and Staff
American Income Life’s current CEO is Steven K. Greer. He has been the CEO since 2018. Steven joined the company in May of 2001 as an independent contractor and has worked hard to climb the corporate ladder since then.
Over the past 21 years, Steven has held many positions at American Income Life, with his 12-year-long tenure as state general agent being the highlight of his professional career.
Steven holds a college B.A degree from Western Kentucky University class of 1995. Before joining American Income Life, Steven had a fruitful tenure at General Electric as a financial analyst.
American Income Life has approximately 7,119 employees at its corporate offices. This figure does not include the thousands of independent contractors that work for them part-time. This figure is primarily made up of the executives and analysts that the company employs.
Is American Income Life a Pyramid Scheme?
American Income Life Insurance is a wholly owned subsidiary of Globe Life Inc. (NYSE: GL), an S&P 500 Company. It is an international company protecting working families in the United States, Canada, New Zealand
So is American Income Life a pyramid scheme? Not according to the United States Securities and Exchange Commission.
A pyramid scheme is “an investment fraud in which new participants’ fees are typically used to pay money to existing participants for recruiting new members.”
The SEC goes on to state that pyramid schemes have the following traits:
- No genuine products or services are sold;
- Members are promised high returns in a short period of time
- Members are told the business model allows them to make easy money or passive income
- There is no demonstrable revenue generated from retail sales
- Members must make a purchase to sign-up
- The business has a complex commission structure
- The business model places a high emphasis on recruiting
Why American Income Life Isn’t a Pyramid Scheme?
American Income Life is not a pyramid scheme because it doesn’t meet the above mentioned criteria.
#1. The Company Sells Insurance Policies
For nearly seven decades, American Income Life has been selling insurance policies. They have a real business that lets employees to earn commissions based on insurance sales.
#2. There is no sign-up fee
American Income Life provides its independent contractors freelance employment opportunities where you can join and work for them on a 100% commission basis. You do not have to pay anything to sign-up to work for them.
#3. There is Demonstrable Revenue Generated from Retail Sales.
According to the American Income Life website, it generated $273 million in revenue in 2021. So, when there is no sign-up fee, and organic revenue is generated, it ensures that the company is not a pyramid scheme.
Why Do People Think American Income Life is a Pyramid Scheme?
People believe American Income Life is a pyramid scheme because of its emphasis on recruiting.
American Income Life emphasizes that you should develop a team of your own if you want to increase your income potential with their website career page stating, “As an independent contractor with AIL, you will learn how to recruit, train, develop, and manage others.”
How Much Money Can You Earn from American Income Life?
American Income Life does not disclose the salaries of its insurance agents. However, this is common practice among insurance companies.
Nevertheless, a quick search on Indeed reveals that salaries as an insurance agent at American Income Life can range from $50,000 to $150,000.
So, how much money can you make? According to Indeed, insurance agents can earn an average of $100,000 annually.
This is significantly higher than the average wage for an American worker. These salaries, however, are not guaranteed because they are based on commissions and performance.
How to Earn Income Through American Income Life?
American Income Life offers you an opportunity to make money in two ways. These are:
- Earnings as an Independent Contractor
- Earnings as One of the Various Full-Time Employee
Method #1. Earnings as an Independent Contractor
The first way you can earn money at American Income Life is to work for them as an Independent Contractor sales agent.
Method #2. Residual Income
The second way you can earn money at American Income Life is through residual income. According to their website, this works the following way:
“Every time as a manager, one of your producers makes a sale, a percentage of the premium paid on the policy each month is credited to you. Based on the vesting provisions of the contract, month in and month out, as long as the policyholder continues to pay their premium. Your monthly renewals increase with every sale!”
Method #3. Earnings as One of the Various Full-Time Employees
The third way you can earn money at American Income Life is as one of its full-time employees.
These positions offer guaranteed pay, and their salaries range from tens of thousands a year.
The average salaries are summarized below:
Great Advantages of Working as an American Income Life Independent Contractor.
Pro #1. You Can Earn As Much As You Want
The American Income Life compensation plan operates on an “Opportunity Unlimited” philosophy. This means working with them; you can earn as much as you want. There is no commission cap limit here. So if you’ve got what it takes, then the sky’s the limit for you here.
Pro #2. You Can Get Started Within Two Weeks
American Income Life provides training to all their recruits, and the best thing about them is that the whole training takes a mere two weeks to complete.
They offer sales training and supplemental coaching and training through online resources. Leading sales professionals mentor you through videos and articles on how to present their products confidently.
Key Disadvantage of Working as an American Income Life Independent Contractor.
Con #1. You have to generate your own leads, which can be difficult without experience.
This disadvantage is twofold. First, it can be difficult to generate leads without any experience. Second, even if you are successful in generating leads, you may not be able to convert them into sales because of your lack of experience. This can leave you struggling to make any money at all.
Con #2. Income potential is not guaranteed, as it is based on commissions.
One of the biggest disadvantages of working as an insurance sales representative is the fact that your income potential is not guaranteed. Your income is based on the commissions you earn, so there is no guarantee that you will make a certain amount of money each month. This can be frustrating if you are counting on a certain salary to make ends meet.
Con #3. There is a lot of competition, as it is a commission-based job.
The competition for insurance sales representative jobs is fierce because it is a commission-based job. This means that you have to work hard to sell policies and earn commissions, and many other people are also trying to do the same.
This can be frustrating if you cannot sell policies as quickly as you would like, or if you are struggling to make ends meet.
Final Thoughts
In conclusion, American Income Life is a good income source for people seeking flexible hours and exponential growth in a new industry.
This insurer company’s business model enables their independent contractors to work on their own time and earn as much as they want.
When you work here, you are your only competition, and you are solely responsible for whether you are doing well or not, as no other external factors such as office politics or favoritism are involved in this job.
Who Would American Income Life Be a Good Fit For?
I believe American Income Life would be a good fit for those seeking a career in insurance. It is one of the most forward-thinking insurance companies nowadays.
This is a great place to start for people who want to increase their income while also learning the ins and outs of the insurance industry. While the initial investment of time and training is not guaranteed to yield high returns, it is at least not a pyramid scheme.
Simply put, you are paid based on the commission. Additionally, you will be given bonuses and additional pay if you are a high performer.
Frequently Asked Questions
How Many Countries Does American Income Life Operate in?
American Income Life currently operates in 49 states of the United States of America, and along with that, it also operates in Columbia, Canada, Newzealand, and as a subsidiary, it also operates in the Republic of Ireland.
Where is American Income Life HeadQuarters Based?
American Income Life initially started in Indianapolis, Indiana. However, in 1958 when the company had surpassed annual revenue of $15 million a year, its executive offices moved from Indianapolis, Indiana, to Waco, Texas.
What Percentage of Commission Can I Expect To Earn at American Income Life?
New American Income Life independent contractors begin with a 50% commission on every contract sold. However, only 65% of your payment is received upfront, with the rest held by the company for six months. For example, your commission will be $500 if you sell a $1000 annual premium policy.
Yet, you will only be paid $325 in advance. This is standard practice in the insurance industry. Most carriers withhold a portion of your commissions if your policy lapses or the client cancels.
Can I cash out my life insurance policy?
Is it possible to cash out a life insurance policy before death? Yes, you can take money out of a permanent life insurance policy before your death. There are three primary options for doing so. You may borrow against your policy (repayment is optional).
Is term or whole life better?
Term coverage expires after a set number of years, while whole life offers lifelong protection—so long as you can keep making the premium payments. However, because whole life pays out differently than term policies, premiums for whole life cost five to 15 times more. Therefore, if you’re conscious about your budget, whole life may not be an option.
Sources
- American Income Life Company Reviews: Company Reviews
- American Income Life History: American Income Life History
- American Income Life Company Profile: Mission & Vision of American Income Life
- American Income Life Full Time Employee Average Salary: American Income Life Full Time Employee Average Salary
- American Income Life Independent Contractor Salary: American Income Life Independent Contractor Salary
- American Income Life Employees: American Income Life LinkedIn
- Securities and Exchanges Commission Pyramid Scheme Definition: Pyramid Schemes
- American Income Life Opportunities Unlimited: American Income Life Opportunities Unlimited
- American Income Life 2021 Revenue: American Income Life 2021 Revenue
- American Income Life Journey So Far: Journey So Far
- American Income Life Annual Report 2021: Annual Report 2021
