Primerica Life Producer Practice Test

What is the maximum value of a gift that an agent can give to an insured without violating the regulation on rebating?

1. $10

2. $25

3. $50

4. $100

The correct answer is: $25

The correct answer is based on standard industry regulations regarding rebating, which often prohibit insurers and agents from offering value that could be seen as coercive or incentivizing customers unfairly. In many jurisdictions, including those that follow similar guidelines to those of the National Association of Insurance Commissioners (NAIC), the maximum value for gifts offered by an insurance agent to an insured is typically set at $25. This limit is intended to maintain ethical practices in the insurance industry and ensure that the sales process remains transparent. Offering gifts above this threshold could be interpreted as a form of rebating, which may encourage clients to make decisions based on value received rather than the merits of the product itself. By adhering to this $25 guideline, agents can avoid potential regulatory scrutiny and uphold the integrity of their profession.