Executive TLDR
Most traditional businesses fail long term because top producers eventually leave and take production with them.
Primerica’s replacement system allows leaders to replace themselves once and receive overrides for life.
Producers write business independently; reproducers develop independent producers.
Securities licensing is essential for building a balanced, lasting RVP business.
Build wide, develop level three and four leaders, and focus on duplication over personal production.
Video Summary
In The Fatal Flaw In Most Businesses (And How Replacement Fixes It), Jon Lavin delivers a foundational leadership lesson on how to build a durable, long-term Primerica hierarchy. He begins by identifying the structural weakness in most traditional business models: when top producers grow successful, they demand more compensation and eventually leave to start their own operation. This forces owners to rebuild production repeatedly, preventing long-term freedom and stability.
Primerica’s replacement system solves this flaw. When a leader promotes to Regional Vice President, they replace themselves one time in their base shop. In exchange, they gain a contract that allows them to receive future replacements indefinitely. Instead of losing their best people, leaders are incentivized to develop independent business owners who can thrive on their own.
Lavin outlines the leadership ladder: position leaders (title only), permission leaders (relationship-based), producers (independent writers), reproducers (developers of producers), and legends (long-term impact leaders). He stresses that future RVPs must be fully licensed in both life and securities to operate a balanced Buy Term and Invest the Difference model. Without securities licensing, teams slow down before promotion and lack long-term investment-based strength.
The 12-8-5-3-1 system remains the foundational activity structure: 12 appointments set, 8 kept, 5 financial needs analyses, 3 life closes, and 1 recruit. Consistent execution builds district leaders, divisions, regionals, and ultimately a strong RVP base. Lavin cautions against short-term “RVP runs” built purely on personal production. True stability comes from developing level three and four producers who generate consistent override income without constant supervision.
The core message is clear: replace yourself once, develop reproducers, build wide direct relationships, master duplication, and create a hierarchy that produces sustainable income for decades.
FAQs
1. What is the fatal flaw in most businesses?
Top producers eventually leave to start their own operations, forcing owners to rebuild production and income repeatedly.
2. How does the replacement system work?
You replace yourself once when promoting to RVP, and in exchange receive replacement overrides for life.
3. Why is securities licensing critical?
Without it, leaders stall before RVP promotion and lack a balanced income model.
4. What is the 12-8-5-3-1 system?
12 appointments set, 8 kept, 5 FNAs, 3 life sales, and 1 recruit — the foundation of consistent growth.
5. What is a producer?
A licensed representative who writes life and securities business independently.
6. What is a reproducer?
A leader who develops independent producers who can also train others.
7. Why is building wide important?
Wide direct recruits create deeper levels of production and stronger override income.
8. What happens when leaders rely only on personal production?
They risk burnout, inconsistent income, and limited long-term leverage.
9. What does “built to last” mean?
A hierarchy of licensed reproducers operating independently with consistent production.
10. How do you know your base shop is strong?
When multiple producers consistently write business without direct supervision.
11. What creates long-term override income?
Independent producers, reproducers, and promoted RVPs generating consistent volume.
12. What is override income?
Compensation earned from team production rather than personal sales.
13. Why do some RVP runs fail long term?
They are built on short-term production instead of duplicatable systems.
14. What is the leadership ladder?
Position leader, permission leader, producer, reproducer, and legend.
15. What is the ultimate goal of replacement?
Long-term financial independence through duplication and sustained hierarchy growth.
Glossary
Replacement System – A structure where an RVP replaces themselves once and receives future replacement overrides.
Producer – A licensed representative who writes business independently.
Reproducer – A leader who develops other independent producers.
12-8-5-3-1 – Activity model measuring consistent appointment, closing, and recruiting performance.
Buy Term and Invest the Difference – Primerica’s financial strategy combining term life insurance and investments.
Base Shop – A leader’s primary organization prior to RVP promotion.
Override Income – Earnings generated from team production rather than personal sales.
Regional Vice President (RVP) – An independent business owner position achieved through replacement and hierarchy development.
Transcript:
We use the mobile f and a a lot now, but we like to close business for us on a second call. A lot of people like to close on a first call. If you close on a first call, God bless you. I love closing on a first call when the business stays on the books. I love that program.
Okay.
But I also like doing, I’d like being really good at my new people, introducing me to a lot of new people. And one thing I know about new people that are in the business is they don’t want to feel that the person training them is pressuring their friends. If you want large numbers of appointments set for you by other people and they keep taking you out to their warm market, they got to like you and trust you. Whatever your system is that does that, they got to like you and trust you. And it takes time to get people to like and trust you. So the trap is becoming just like an advisor because it’s easier to do than to deal with large numbers of people.
I promise you, once you go into the people business, as rewarding as it is much harder than the financial advisory business. That’s why most people won’t do it, which I’m fine with. How many of you are okay with the fact that most people aren’t willing to work hard? See, so what I’m trying to tell you all is if you were one of those people that came here today thinking, hey, look, I know this is RVP’s and qualifiers and you wouldn’t be here on a Friday afternoon unless you were serious about building something great, Is that fair to say? Alright, so let’s kind of dig in the leadership ladder. There’s different levels of leadership. Some leaders are position leaders.
They’ve got a title and it looks good for a little while until people find out that all you are is a title, all you are is a person that has stories from the past, nothing’s happening now. That’s a position leader. You call yourself something, but you don’t really live up to any standards of excellence. One of the things that the Indiana coach spoke about is the standards that are set, that everybody on the team has to be aligned with the standards. And when everybody on the team is aligned with the standards and the game plan and the playbook, you can move fast and you beat everybody. And he said the hardest part of that is you got to get rid of some players who don’t want to play by the rules of the game that the coach set up.
And so each and every one of us has to Make a decision. How do we want to build this? Do we want it fast, or do we want something that’s built to last? I know you want something built to last. By the way, if you go fast, you’re going to learn a lot fast. If you go fast and stay, you’ll build something to last because you’ll know what works and what doesn’t work. So much of our business we have to go through second is permission leaders. A permission leader is like, everybody’s friends, like the coach and the team, they’re all kind of the same. They’re all buddies. All right? And then you’ve got a producer, you’ve got a production, you’ve got somebody who produces. They write business month in and month out. We’ll talk about that in a moment.
They’re licensed and they write business. So I’m going to ask all of you a question, and you just. How many of you have an insurance license? Okay. How many of you have a securities license? Okay, maybe I should ask that a different way. How many of you don’t have a securities license? Let me just. Okay, thank you. Thank you for being honest. You got to change that. You want to change that quick. One of the biggest challenges I see in people who want to become vice presidents, this talk is about becoming a regional vice president. And believe me, our number one goal, our hierarchy is 80 of them. Our number one goal. I’d love to have 200 of them, but I’m not interested in half of them not succeeding.
Our business is about producing RVP’s who know how to make money and how to run a solid business. And in my opinion, learn how to run a balanced business. It’s called Buy Term and Invest. Buy term and Invest. The difference. I know that if more of our team, and we have an amazing team, and we have a group of people on our team that do a lot of production and a lot of recruiting, and they make a lot of money. And their teams make a lot of money, and they do very little securities. And what I notice about those teams is there’s always kind of a challenge somewhere before the time they’re ready to promote an rvp. And the challenge is that the trainers weren’t securities licensed. The divisions and regionals weren’t securities licensed.
And now to go to rvp, they need a securities license. So now they have to slow down from all the momentum. They’ve built recruiting and field training, which is great, to get a securities license, and then they get the license or they don’t. Let’s Say they get the license. None of the people they field trained saw anybody get a security sale. Okay? They don’t have any residuals coming in. What’s even worse is I promote you to RVP because you got your license, and now you want me to train you in the securities business on a 7% override. Okay, so there’s two problems that come with this. And let’s talk about the clients that don’t have an investment.
And let’s talk about the end of.
Term when they’re 20 or 25 or 30 years is up and they have to renew at a big high. They don’t have any money saved. Can we talk about that?
So there are many negatives to not.
Having a securities license.
So a producer, you can write business next level. We call it a reproducer. That’s the developer.
That’s the person who develops other people. Well, I will tell you, one of the keys to becoming a vice president is that you need to have developed over time.
Producers, people who can write business without.
You, and reproducers, people that can train others that can write business without them. Okay? I want to make sure you all got that. Producers, they write business without you. What does that look like? That looks like they turned the sale in and got the thing issued and added a securities trade to it. And you didn’t hear about it? Hardly. Other than on the leader’s bullet. They didn’t call you to ask you, hey, Coach, how do I close this sale? Do you need that sometimes? Of course.
But a producer can do it all by themselves.
Now, also, I will say this, that the best producers are really good at one thing that causes them to move quickly. And that is I’m going to make sure I got the time right. Okay? That is that they produce and they debrief.
They produce. Then they call their trainer to debrief. So I’m not saying you don’t need to know what’s going on. I’m just saying you need to hear about it after the first appointment. Here’s what happened, Coach. Anything I could have done better? Here’s what I’m going to recommend to them to close anything I could do better. Am I missing anything? So a debrief is great, but I want people who can meet with a client on their own without me having to get on zoom or meet with them. You all get it. I want an independent person. Then you’re building what? A real business that could generate real overrides and real compensation. The reproducer. The reproducer concept, I can’t imagine Going to regional vice president and I’ve never produced solid reproducer means I’m not ready.
You see, the magic of our business is that you go to RVP and you replace yourself once and then you receive replacements forever. See, basically what you’re doing is you are replacing yourself in the base shop one time in exchange for the regional vice president contract and the ability to promote regional vice presidents and take replacements for the rest of your life. You give your exchange one time, you replace yourself so the RVP doesn’t have to start over. Do you all understand that concept? Let me. I’m going through my slides before I’m getting to them. You then have legends, okay? And legends. I’m like a legend, okay? I’m a legend. Okay, look, I’m 46 years here. You want to be one too after 46 years, right?
So really your reputation precedes you and.
That leadership style, you know that would be the goal, to get to a place in life where the money comes in and all you have to do really is talk. Everybody else does the recruiting, everybody else does the premium, everybody else does the investments, everybody else does the administration, and you get to talk as much or.
As little as you want and enjoy your life.
How many of you like that idea? Okay, so you can’t get there without what I’m talking to you about. The way you get there is with this whole thing called replacement. Let’s take a look at this.
The.
The foundation. 12, 8, 5, 3, 1. You’ve all heard that, right? What’s 12 stand for? Appointments set. What’s 8 stand for? Appointments that keep. What’s 5 stand for? FNAs or commitments to do a carryback. What’s 3 stand for? Three life closes. What’s 1 stand for? One personal recruit that comes out of that.
Or recruit. Four year recruit if you’re training.
So 12, 8, 5, 3 one. What does that produce?
12, 8. So let’s go to the 8.
8 is 2. Listen, it’s two appointments a week in the right market in four weeks, that’s 8. And out of that, if you’re part time, just getting started, just learning, what’s going to come from that? At least 3,000 in premium. And a recruit, what’s going to come from that? If you’re a district leader, probably $1,000 income.
And so many of us focus on the big numbers.
What I want to focus on is can I get somebody part time to consistently make 1000 bucks? How many people on your team? And you all want to start tracking this in Your base shop on your team make $1,000 a month consistently. Not one month up, not one month down. They didn’t make the thousand a month because they did a big securities trade. They did the thousand a month because they did 8, 5, 3 1. That’s the building block of our whole business.
Because if you could do 8, 5.
3 1amonth, then you could, if you had more time, you could do 8, 5, 3 1, what a week. So when we start looking at that, we understand that.
What are the results? Well, you’ve got district leader. A district leader would have two or.
Three producers and they’re doing, you know, six to 9,000amonth. Division has four to six producers.
A regional has seven to 10 producers and the RVPs got 15 plus producers.
That should be the goal.
Those numbers produce this big income that we’re talking about, this 250 to $500,000 a year.
Passive. So the goal, if I’m you, how many of you are future RVP’s, you’re.
Not yet an RVP, just raise your hand. Okay, so the goal this weekend is for you to get one or two nuggets, one or two things that you can add into your a clear understanding and then make some decisions about what your RVP promotion is going to look like. Make some choices and decisions about what that’s going to look like. And what should that look like?
I mean if we really evaluate it.
What should it look like? Look, if you’re a big personal producer and you got an 85% contract and you’re a personal producer means if you wrote a thousand dollar case, you make. I’m just using this General, you’re making 80, you’re making $850.
And if you produce, you get to get the money.
And if you don’t produce, how much do you get? And do producers burn out after a while?
So you work and work and work.
You can make money.
It’s great.
You got a great contract, you’re producing, you’re making money and then you burn out and then you stop working.
When you burn out and then what happens?
No money. Actually what happens is the chargebacks start to hit. Because usually producers are so good at writing business, they write business. They shouldn’t write. They write a lot of business because you can’t say no to them.
They’re that good. There’s a lot of you out here right now.
You are so good. It’s impossible for someone to say no. So they say yes. And then they decide later. Verse a Smaller override on a larger number of people. And so when you get a promotion from district to division, you go from 50 to 60%. What you’re supposed to do is do a regular, steady, larger block of business because you’re getting a higher contract because your RVP gave up.
If your RVP’s at 110 and.
You’Re at 50, your RVP has a 60% override. And when you get to 60, they get a 50% override. And when you get To 70, they got a 40% override. Right?
You all get. So you’re getting.
Your RVP’s getting less and less on your volume. So what are you supposed to do? More volume. So the only way I know to do more volume is either you’re going to do it yourself, that’s not the goal, or to produce more, get more producers. How many people can you get independent of you as fast as you can. Now, once you make the decision that’s the business you’re going to run, that’s the play you’re going to run, then you start taking on. You look at everything different. You start looking, are my systems transferable? Is what I’m doing duplicatable? I can get a result, but can I teach somebody else to get a result? So many of us are so good that we do a presentation and the person we’re training says, man, you are so good, I’ll never be that good.
They quit based on I’ll never be that good verse. You want it the exact opposite where they go, man, I could do that.
As a matter of fact, I don’t.
Even want you going out with me anymore. I’m tired of splitting with you.
Solving the fatal flaw. The exchange, the replacement solves the fatal flaw. What’s the fatal flaw? Here’s the fatal flaw in most businesses. Most businesses, whether it’s insurance companies, mortgage companies, brokerage firms, restaurants, law firms, medical practices, hair salons, it doesn’t matter. What’s the biggest problem for most people who own a business like that, where they recruit and train people to do that business who work for them, what’s the biggest problem? What’s the biggest problem? Well, what happens is if you’re really. If I’m. You’re in, let’s say you’re in my real estate office and you’re really good and you’re doing half my volume and every time you do a sale, I get half the commission eventually. What do you want? If you’re the best guy, what do you want? Or gal what do you want? You want more, right? And so I give you more.
And then what do you want after another six months or a year, what do you want then?
More.
And so if I want to keep you, I give you a little more. And then eventually, what do you want? All of it.
You want all of it? You go, boy.
I really appreciate John. He’s a great guy and I love him.
And helped me and Patty.
They’re so nice and. Oh, and they taught me so well. But I got to have my. I got to have something for my family. And so those people then learn in an environment and then go open their own. They open their own restaurant, they open their own law practice, they open their own hair salon, they. They open their own insurance agency, they leave. And now what you’ve done is you’ve lost your best producer, half your volume, and created your competition. And under those scenarios, in normal businesses, what incentive does the owner have, the broker to teach that new person and mentor that new person to teach them to better than they are? What incentive would you possibly have in the normal business world or the financial industry or the insurance industry in particular, what incentive would you have to teach them everything you know?
Zero.
Zero. That’s a big problem if you want to get free. See, Art Williams developed it, because you have to start over every time they leave. Every time they leave, you got to go out and do it all over again. And if I’m 46 years in the business and I want to grow my income and my best guys just left, I gotta go do it all over again. But if you do it right the first time with a standard and a commitment and communication about what you’re doing with your team and with your RVP’s, and with their RVPs, conversation about how to do it right, how to do it big, how to do it proud. If you do it that way, you build something that lasts forever. Because the culture set, everybody knows what the rules are.
They understand the pitfalls of not doing it the right way, and they understand that the rewards are true freedom. See, once the cycle of replacements start, you give a replacement and now you’re in a position to what receive. And your RVP got a replacement. And when they promote that person, rvp, what’s the RVP get again? Another replacement. They promote another one, and what do they get? Another replacement. So you could promote 10 RVs, one a year for 10 years, and from that have 20 RVs direct to you because of this replacement, this ownership exchange system. So I Bought into that. I bought into that early. Dick Walker explained it to me. Art Williams, look, that’s the way the company was built. The, the biggest.
See, the replacement system started very interestingly in the early days when I got promoted to RVP, my override on RVP’s was 3%. That’s all there was. That’s all the points there were. You’d make a sale and the company.
Had enough compensation to pay out to.
The RVPs and 3%. And so what would happen is in.
The early days, the way you got promoted to RVP is you had to leave everything you built and you had to move to a new city and start again. And that’s when you got promoted to rvp. And you see, that’s how the company expanded all across the United States. And so Art said, look, if you’re only going to get 3%, you won’t have any incentive to promote somebody. No matter how good they are. You’re going to. Right. Hold them back might be a word that someone would use. So Art said, well, we got to incent this guy to promote people. So we’ll do this. They’ll replace themselves and in exchange for the contract, that’s how it started. And it’s the most brilliant system that’s ever been developed because you give once and you receive forever and ever.
And that means, by the way, that you ought to right now be focused. It says I have 2 minutes and 30 seconds. Is that correct? Okay. That means that right now you all ought to be very focused on new direct width, new direct to you with new people that you go find, that you bring in, that you build relationships with so that you can create an income that you create an income for yourself that’s coming from level three and level four leaders, that your income is coming from producers and reproducers. That’s the sign that you know how to do this. And once you have that sign, and you’ll know when you’ll know it, because it’ll show up right on the leader’s bullet. Because these level three and four producers, it’s every month. It’s not like every once in a while. I mean, it’s consistent.
You can see it. There’s a track record, okay? And then obviously people go, well, how do we know that it’s built? It’s got to be built. It ought to be real. In other words, so many people. I’m doing my RVP run now. I get it. I like that. I get it. You’re going to do your rvp But. But are you doing it like by yourself with a couple people, or do you have a team? No. Runs. How about built?
Built to last?
Built forever. How do you really build it to last and build it forever? How do you build a hierarchy? I’m out of time, but I’ll just close. How do you build a hierarchy? You create your philosophy. You do it first. You. You create a picture of what it’s going to look like if it’s done right, and then everybody wants to copy. And if you do that and you have a. I had. My replacement was a guy named Chuck Davis and another guy named Britt Murphy. I started in Lois and Kennedy under Dick Walker.
That’s where I started.
Tampa, Florida. That’s where I learned this business. And Britt was my first recruit from the cookware business and he came in and was my buddy. And then I was fortunate enough to recruit Chuck Davis, who came from a company called Western and Southern Life. And he had sold 90 whole life policies in his first nine months at Western and Southern Life. And I recruited him and he recruited all the guys out of the office. We closed that office. That Western and Southern Life office on Kennedy Boulevard closed down. And we replaced all those policies. He wasn’t allowed, but he could tell.
Me where they were.
And so went, we replaced all that business and all those guys came and. And then I moved to Pennsylvania because I had another direct recruit up there named Saul Weiner, who was my mother’s cousin. And they had a whole team that. My whole hierarchy literally came from that group. And then my Florida group was my replacement. And then I had my new team. And they all saw me give those two guys big. That was big. They were doing 20, 30,000, a premium now, I think. And look, everybody does it different. But I would say if you build it right, here’s what you know. Your income is solid. You’re making 40, 50, 60, 80, 100 grand while you’re in the base, you know how to do the business. You’ve got your securities license and your clients are getting that.
So you’ve got a track record of knowing what you’re doing. You’ve got a replacement that’s a reproducer that’s doing about 10 by 10 consistently who’s licensed, fully licensed, full time and on their own. And. And now you can point to that for the rest of your life. Cause that’s a continuum that will never stop. And you get to point to what you did. You do it one time, you point to it forever. And as you’re building as you get wide and you’re training and developing people, you’re always telling them, here’s the magic of the system. Or better yet, you bring them to an event like that and let somebody like me tell them about it, okay? Cause I’m not backing off this. This is what makes us great. This is what gave us a life.
And you ever want to talk to somebody about a life that came from replacement, you want to talk to Charlemont Jenniston. He’ll tell you, I don’t know how. I think he’s got maybe two legs and everything else that he’s got. His 1.8 million income and all those RVPs came through replacements from two good legs. So you all understand if you go build three good legs right now, you might be brand new. Three people who could do it on their own without you. Three reproducers, one will probably be the replacement and. And two, stay with you and watched you do that, and you are set for life. You are set for life. So I hope that this was a good way to start today. I know it was very direct. We’ll see you a little later. Thank you.
