Rebating any inducement offered to the insured in the sale of insurance products that is not specified in the policy.
Rebating is the act of returning a broker's commission, or a portion of it, to the insured in an effort to encourage the sale of insurance. Usually, the insurance agent provides the rebate money.
The term "inducement" can also be used to describe rebates. However, the term "inducement" can also refer to indirect payments or advantages provided by the broker or agent.
Many provinces and states consider rebates to be illegal. The main goal of legislation governing rebates, which varies greatly, is to safeguard consumers from deceptive sales practices by insurance companies and authorized agents. Brokers who offer discounts or other inducements to customers to buy life insurance run the risk of losing their insurance license.
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