Can You Give Your Clients Referral Bonuses?

[enterscope]

One technique that has helped me nearly eliminate the lead generation process, is offering commission to my clients that refer new projects to me. I was wondering if this was something legal to do if you are a licensed insurance agenct/broker?

Let's say you meet someone in line at the grocery store and you end up helping them purchase an insurance policy. Can you tell them about your $100 refer-a-friend program where you give them $100 bonus for each person they refer to you?

 

[SWM]

Absolutely not, do not venture down that road!

 

[iiinycboi]

you can give them like a 5 dollar gift card lol. anything more in (state specific) would be rebating...

 

[Guest]

In California it is legal. The only stipulation is that you must give the referral regardless of if the person buys a policy or not otherwise it is considered a commission. To receive commission the person must have a license. Make sure you keep proper records.

 

[iiinycboi]

oh yeah if you pay for every referral then i think its legal everywhere? you just cant pay contingent on the sale.

 

[VolAgent]

Make the bonus contingent on the quote. Person gives you enough info to quote and accepts your quote, pay the bonus. Person won't give info or let you send the quote, no referral bonus.

 

[Vikings28]

WHAAAAT? illegal? You can most certainly offer prizes for referring NEW CLIENTS. Otherwise I'd be going around to every insurance agency with my buddy stating that I had referred him, can I please have my $20.00 gas card?!?! Haha, you must state that you are offering these incentives for NEW CLIENTS, not just for a person to come in for a consultation.

 

[Enosis]

You want to pay a $100 commission - might be cheaper to buy a lead - or hire a telemarketer to set appointments.

 

[Aram Fingal]

If it is contingent on a sale then it is rebating and it is illegal.

WHAAAAT? illegal? You can most certainly offer prizes for referring NEW CLIENTS. Otherwise I'd be going around to every insurance agency with my buddy stating that I had referred him, can I please have my $20.00 gas card?!?! Haha, you must state that you are offering these incentives for NEW CLIENTS, not just for a person to come in for a consultation.

 

[lyncze]

How about offering a gift card once the referral becomes a client?