What does rebating involve in insurance sales?

Rebating in insurance sales specifically refers to the practice of sharing a portion of the agent's commission with the client as an incentive for purchasing a policy. This can take the form of either direct financial benefits or additional services that the client would not normally receive. By offering part of their commission back to the client, agents aim to make the policy more appealing and encourage the decision to purchase, effectively lowering the overall cost from the client's perspective.

This practice is heavily regulated and, in many jurisdictions, it may be banned outright or restricted due to concerns about the potential for unethical sales practices or unfair competition. Understanding the implications and regulations surrounding rebating is crucial for insurance professionals, as it directly impacts their sales strategies and compliance with the law.