Rebating in life insurance is using money or gifts to incentivize a sale. E.g. An agent telling someone that they will refund 1/2 of their client's life insurance premium back to them if they purchase the policy through that agent. It is illegal in most states and life insurance agents who rebate can face high fines and penalties.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
What is rebating in Life insurance? It is a situation where some of the commission earned in the sale of life insurance is given back to the insured as an incentive to close the deal. Rebating is against the law in some states and some companies do not allow rebating in regards to their product. Rebating goes against the fair purchase of life insurance as it creates situations where one person could get a better deal than another for the same product.
Sure it's great if you get some money back but, did you get as much as that other guy? Did you report your rebate as income to the IRS like your supposed to? Rebating sort of creates a mess and that is why most states and most insurance companies frown upon it.
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Sure it's great if you get some money back but, did you get as much as that other guy? Did you report your rebate as income to the IRS like your supposed to? Rebating sort of creates a mess and that is why most states and most insurance companies frown upon it.