A deduction taken from a set payment or charge. As a rebate is given after payment of the full amount has been made, it differs from a discount which is deducted in advance of the payment. In foreign trade, a full or partial rebate may be given on import duties paid on goods which are later re-exported.
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An incentive offered to the insured for purchasing the insurance, such as money taken from the agent’s commission and given to the insured. This type of incentive is illegal. Reduced premiums or rate adjustments are not considered rebates and are therefore legal.
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In insurance, a portion of an agent’s commission returned to a customer as an inducement to place the insurance through the agent. This practice is illegal in most jurisdictions as against public policy.