Life insurance rebating occurs when life insurance agents pay part of their commission to their clients in exchange for writing a life insurance policy on them. The rebating may also take the form of gifts, trips, or discounts. It is used as a way to provide an incentive for people to buy from them.
Life insurance rebating is illegal according to state insurance laws in all but two states, and is considered an unethical way to do business. Fines and penalties are high, so that most life insurance agents shy away from offering any type of gift at all to clients who have placed policies with them, even though small tokens of appreciation are legal in most states.
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Life insurance rebating is illegal according to state insurance laws in all but two states, and is considered an unethical way to do business. Fines and penalties are high, so that most life insurance agents shy away from offering any type of gift at all to clients who have placed policies with them, even though small tokens of appreciation are legal in most states.