offer free quote in exchange to enter drawing

Dec 17, 2018

  1. Frank Salinas
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    Frank Salinas New Member

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    Hi everyone, new member.

    Question about a scenario. I'm a life agent in Texas

    I'm at a booth at a special event and I want to have a drawing for a prize (lets say a tablet of some sort)

    I have a sign that says something like : get a free life insurance quote & enter to win a ___

    is it safe to say I give everyone a chance to win who walks up even if they
    don't want a quote?

    and the drawing is for anyone who enters, not based on buying anything, no purchase necessary
     
  2. rousemark
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    rousemark Still Here!

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    As long as anyone can enter with no requirement to purchase you should be OK.. At least you would be in TN .. Insurance regs vary from state to state.. Most people that do this don't even require them to get a quote.. They simply use the promotion to gather names and info and then call on the people later.. The prize doesn't have to be large.. We used to offer the opportunity to get a free six pack of Coke.. Everyone who completed the information was a winner and we would call them to deliver their free six pack.. That got us in the door and that is all you want to accomplish anyway..
     
  3. VolAgent
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    VolAgent Guru

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    You want to be able to contact every last person and tell them they are a winner. Just make sure to follow any state specific rules. As it is your business and license, you owe it to yourself to look it up or use a professional (attorney) you trust to do it for you.
     
    VolAgent, Dec 18, 2018
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  4. StarterAgentKG
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    StarterAgentKG Expert

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    At my old job we did those all the time, they stopped working towards the early 2010's because understand that your just going to call and try to sell them stuff. You half to really watch out how you are advertising the drawing. we got reported and sued because we used more glamorous wording then what the prize actually was. We had to actually give a customer a $1000 gift card because of the way it was worded it sounded like we were offering the gift card just for signing up. So call a lawyer and make sure you do everything as clear as possible
     
  5. adjusterjack
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    adjusterjack Guru

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    You might be running afoul of your state's gambling laws if somebody has to "do" something to enter.

    Why not be a little more unique (and up front) with your booth. Put up a sign, something like:

    LIFE INSURANCE FOR SALE.
    DON'T DIE WITHOUT IT.

    Bet you get some interest, if not some sales.
     
  6. AndrewRoche
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    AndrewRoche Expert

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    I would be very careful using this strategy.
    In Pennsylvania insurance producers are prohibited, pursuant to 40 P.S § 310.46 (Inducements Prohibited), to give anything of value as an incentive to apply for, or purchase, insurance. I think the offer suggested is considered an inducement and currently violates the referenced statute.
    Contact the TX Department of Insurance before proceeding
     
  7. rousemark
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    It is only an inducement if the offer is contingent on making application in order to purchase. coverage.
     
  8. rousemark
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    There is no chance of running afoul of gambling prohibitions as the person does not put anything of value at risk in order to enter the contest.
     
  9. shonceman
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    shonceman Guru

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    I'm in TX now, and haven't done this here. But in VA I did this a few times. Under their contact info was a Box they could check that said "Yes I'd like info and a quote for life insurance." At one time I also had a couple of boxes set up in local businesses where I was offering a monthly drawing for a gift certificate from that business. On the entry form, besides personal contact info, there were several boxes they could check off to indicate their interest in particular products or topics of interest. For example, Life Insurance, Annuities, Retirement planning, etc. I got some business from the events, but not much from the monthly drawings.

    As far as I know, the regs on this type of thing are similar in TX. You just can't make the gift contingent on a purchase. But I wouldn't swear to that! I would recommend that you check with TDI to be sure.
     
  10. Frank Salinas
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    Frank Salinas New Member

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    I found this after researching more:

    Promotions, Giveaways and Rewards

    In the 2013 legislative session, Texas lawmakers passed Senate Bill 840, which addresses items given to consumers for promotional, advertisement or educational purposes, Loftis said.

    It says that promotional, advertising, educational, or traditional courtesy items commonly extended to consumers that are valued at $25 or less are not considered rebates and are allowed under the law. Trinkets from a trade show, for example, would fall into the category.

    It is also permissible for agents to offer a reward to people for allowing the agent to quote their insurance, VanDelinder said, “as long as it’s done for a quote and not for the result of that quote.”

    Offering something in return for the ability to quote “is not a problem within the statute at all. … If you tie it back to selling, then you have a problem,” he said.

    Contests, sweepstakes and giveaways are commonly used as rewards for quoting, VanDelinder said. From the standpoint of the insurance department, those kinds of things are legal, as long as they’re done solely for a quote.

    “And you have to do it for everyone who asks for a quote,” he said.

    The problem, he said, arises from the fact that those practices also are governed under the state’s business and commerce code.

    “The legislature has set up some very elaborate rules for running a sweepstakes in your business or agency or having a lottery. … Because consumers we know have been ripped off many times by these schemes,” VanDelinder said.

    Because the rules are very complicated, VanDelinder recommended that agents seek legal advice before conducting a sweepstakes or lottery.
     
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