Sivan, argue all you want about how great your PYRAMID company is..... but he is simply using this forum to solicit your becoming a member of HIS downline...
Here are the FACTS:
"This is a curious business, selling legal insurance--it is more selling than insurance. The customer forks over on average $251 a year for the coverage. Only $83 goes to pay for supplying lawyers to customers. The rest goes to overhead and profits.
As for the selling part, Pre-Paid looks like a knockoff of Amway, the huge door-to-door marketer of household products that has tiers of agents, which collected commissions from the tiers below. As at Amway, so too at Pre-Paid: Many of the customers at the bottom of the food chain have the hope that they will rise up through the chain. A customer who becomes an agent can get
commissions for selling policies. Move another step up the chain, recruiting people to become agents, and you earn bonuses as well as commissions on policies they sell. Pre-Paid has 286,000 agents trying to sell policies, and 87% of them have bought the insurance coverage.
But what's the hot sales item here--the legal coverage or the right to sell other people this insurance? Agents, lured with the promise of a 25% sales commission on policies they sell, pay a $65 initiation fee. They are urged to take an optional course in salesmanship, which cost $184 last year. Stonecipher gets a $10 cut of that fee, which amounted to $1.2 million last year. Fees charged to agents came to $36 million of Pre-Paid's revenue in 2001.
A key issue is what agents expect to earn in return for forking over these fees. A company filing shows only 29% of the customers keep their policies going for three years or more. But a suit alleges Pre-Paid told agents the three-year retention rate was more than 70%. Without giving specifics, Pre-Paid's Harp says the suit is meritless, as are the others, and that the company intends to fight the suits vigorously in court."
Source:
http://www.marketwaveinc.com/articles/PPL.asp
And
"There could be a reason customers bolt. The suits allege Pre-Paid overstates its legal coverage by telling customers they have unlimited legal access and coverage on a range of matters. In an issue of Connection, David A. Savula, one of Pre-Paid's top recruiters, wrote: "Does our product cover everything? Yes. So if somebody asks does it cover this or does it cover that, we're going to say, 'Yes.'" Stonecipher made similar assurances during an interview in April 2001 on Fox's The O'Reilly Factor, as well as in his folksy corporate memoir, The Pre-Paid Legal Story.
Not so fast. The plans sharply limit coverage for cases involving bankruptcy, alcohol, drugs, preexisting conditions, divorce, annulment, child custody, class actions, hit-and-run accidents, driving without a license and civil or criminal charges associated with a business and tax evasion. The policy covers 60 hours of trial time for the first year that customers join, but there is a big catch. Pretrial work--the bulk of what litigators do--is limited to just 2.5 hours per year in a basic policy.
Customers supposedly get a 25% discount on attorney fees for excluded items--but there's nothing to stop participating lawyers from hiking their rates. What is free under the policy? Will-writing and contract reviews, among other things.
A
teacher-turned-life-insurance-salesman, teacherStonecipher started what would become Pre-Paid in 1972. He was inspired, his corporate memoir says, after he "came face to face with the high price of justice when a car accident he was involved in found its way into the courts. Even though the accident was not his fault, the staggering costs of legal protection nearly destroyed him financially." Not mentioned is the fact that Stonecipher was the one who first brought suit."
Source:
http://www.prepaidlegalsucks.com/news.html