Why Term Life Insurance 'Sales' Don't Exist

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Tim is a licensed life insurance agent with 23 years of experience helping people protect their families and businesses with term life insurance. He writes and creates stuff for QuickQuote and other insurance and financial websites. You can find him on Twitter.

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UPDATED: Aug 6, 2020

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You may wonder why you never see special deals offered when shopping for term life insurance. It seems for everything else you need there’s a sale going on, or at least freebies or extra perks that come with your purchase. Of course, we’d all love to sign up for a term life insurance policy while it’s on sale for 25% off! And certainly, life insurance companies could sell more of the stuff with an occasional promotion. So, why then is it never on sale? Why the absence of free stuff and giveaways? The answer is in one word my friends: rebating.

What is Life Insurance Rebating

Rebating is the act of giving something of value to an applicant by the agent or broker in return for purchasing a life insurance policy. Rebating is illegal in most states, although there are a few states where it is allowed. Even in these few states, there are strict regulations to follow. Each state has its specific definition of what constitutes a rebate. Examples of rebating include:

  • Offering to pay part of the life insurance premiums or giving a share of the commission in exchange for purchasing the policy
  • A gift or service of value to entice the consumer to purchase the policy
  • Offering special deals that are not part of the life insurance contract

While many life insurance agents and brokers would like to offer you discounts and special deals when you buy a term life insurance policy, they simply cannot. If an agent or broker offers you a rebate in any form – beware. Check first with your state’s Department of Insurance for current rules and regulations.

If your agent or broker extends a small courtesy (like a cup of coffee) to show appreciation, this is not considered to be rebating. Sometimes it’s difficult to distinguish the line between a rebate and a friendly ‘and completely legal’ gesture. And this is exactly why most insurance agents and brokers just will not participate in anything that comes close to the definition of rebating.

Thankfully, our life insurance blog is not considered to be in the realm of rebating, and we can share it with you… Free of charge!

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