With the cut-throat competition they face, some insurance agents are inclined to offer a rebate to attract business. When times are difficult, insurance agents may adopt such method to increase sales prospects.With the cut-throat competition they face, some insurance agents are inclined to offer a rebate to attract business. When times are difficult, insurance agents may adopt such method to increase sales prospects. Some of them argue that rebate is a business acquisition cost that the they are willing to bear. In fact, customers are saving from the practice of rebate. Rebate however is illegal by law and banned by most of state constitutions. Insurance agents who are found to offer rebate may face disciplinary actions or even termination depending on the severity of the offense. Why is offering rebate considered unethical? This is because the customers may buy insurance with the intention to get the rebate and instead of considering whether the plans meet their needs. Rebate leads to unhealthy competition. Instead of focusing on increasing the quality of the service, agents take shortcuts to increase sales. Insurance agents who deprive themselves of their commission are not going to give their customers the same kind of service like what other agents give. What if your prospect asks for a rebate? What if a prospect tells you if you don't give any discount, he/she will get insurance from someone else? How do you handle this situation? There are a number of ways to handle this situation: (a) Educate the customers If a customer insists on a rebate, then you can tell the customer it is illegal for you to do so. (b) Help the customers empathize with your situation You can also ask the prospect who asks for a rebate if he is willing to work with the same passion after his boss deducts his pay by a certain percent. Would he expect good service from the agent offering him a rebate? (c) Remuneration versus duration of service If you find that it is not an issue for you to disclose your commission, you can demonstrate to your customers how much commission you earn a year if you divide your commission by the number of years you are going to service them. Once your commission is divided by the number of years of your service, the commission becomes negligible. In fact, your customers may even find you are underpaid. (d) Analogy You can ask the prospective customer if a doctor offers to give him a medical certificate for taking leave from office, would you carry a favorable impression of him? The answer would be no, because the doctor is willing to compromise professionalism for the sake of monetary reward. (e) Give options to the customer Ask your customers, if they can choose only one in between fee and service, which one they would go for. Majority of them may go for service. (f) Dramatize the situation Tell the customer who asks for rebate that you can consider offering discount if he talks to your family members. Tell him if he can convince your family members that they don't need you to bring home any money, then you will offer discount without hesitation. Using these techniques will enable you to convince prospects that it is a bad idea to ask for rebate.