Can a Felon Become a Life Insurance Agent?
As a felon leaving incarceration, you may ask yourself how you can find a job. After a lengthy prison term, you still have to deal with an unstable job history. You may want to find a professional career.
How about becoming a life insurance agent? Can you become a life insurance agent with a felony?
Let’s take a look.
In this blog post, we’ll cover the following:
- What Is a Life Insurance Agent?
- Requirements to Become a Life Insurance Agent
- Is a License Required?
- Background Check?
- What Felonies Disqualify You?
- Steps to Regain Qualification
- Can You Run a Background Check on Yourself?
What Is a Life Insurance Agent?
Life Insurance agents specialize in selling insurance policies that pay beneficiaries when the policyholder dies.
Life insurance agents also sell annuities that promise a retirement income and various types of life insurance plans like ones that don’t require a medical exam.
A life insurance agent meets with a potential client and gathers information about a client’s personal life like marital status, occupation, and income.
A life insurance agent analyzes expenses, savings, and income to provide a quote on a life insurance policy. An agent is paid a percentage of the premium on the policy that was purchased.
Requirements to Become a Life Insurance Agent
To become a life insurance agent, applicants must meet a number of qualifications. They must be at least 18 years old, a U.S. citizen, have at least a high school diploma, and reside in the state where they want to become an agent.
There is no one degree that is required to become a life insurance agent. Some employers in the insurance industry prefer a college degree. For many, a degree in business or management is recommended because it provides a background in marketing, economics, and finance.
As a candidate you must complete a life insurance pre-licensing education, which varies from state to state.
While the number of classroom hours vary, typically 20-50 depending on the state, completion of an accredited school insurance program is necessary. These may be found at a community or public technical college, or private education providers.
New insurance agents often also receive on-the-job training from an employer prior to being hired.
Is a License Required?
A life insurance agent must pass a license exam that covers state insurance laws and category-specific insurance concepts. Each state has different licensing requirements for insurance agents.
Licensing requirements will also depend on the type of insurance that you sell. Life and health insurance agents must pass a licensing exam that covers aspects of life insurance, health insurance, and annuities.
Some types of life insurance may require you to hold a Series 6 or Series 7 securities registration. Exams for these qualifications are administered through the Financial Industry Regulatory Authority (FINRA).
Licensed life and health insurance agents must complete continuing education after passing the licensing exam.
While the specific requirements vary between states, each state wants to know if applicants are of good character. In the life insurance field, the most important traits are honesty, integrity, and trustworthiness.
As an agent, you will work closely with clients and are involved with their financial status. Those clients expect and deserve someone whom they can trust to represent and assist them.
Each state has its own insurance agent licensing requirements, which can include background checks with or without fingerprinting.
Fingerprinting is typically a part of the background check. For this, your fingerprints are run through the FBI Criminal Database, looking for felony convictions.
Currently, there are 25 states that require fingerprints as part of the background check. Another 17 states and the District of Columbia do not require fingerprinting but do require identification and/or some type of background check that varies according to the state.
Typically, those states that conduct a background check will look at the past seven years for felony convictions.
Finally, eight states do not require fingerprinting, a background check, or even two forms of identification.
You can find out more about each state’s insurance licensing requirements here.
What Felonies Disqualify You?
Those who have committed certain felonies are permanently barred from applying for an insurance license.
If you have committed a felony of the first degree, a capital felony, a felony involving money laundering, fraud or embezzlement, or a felony directly related to financial services, you will be permanently barred from applying for a license.
The permanent bar applies regardless of whether adjudication was withheld or your civil rights have been restored.
Other felonies require you to wait for a period of qualification to expire prior to applying for a license. This bar applies to convictions, guilty pleas, or no contest pleas.
The following disqualifying factors are also in place.
There is a 15-year disqualification for all felonies involving moral turpitude that are not specifically included in permanent bar.
A seven-year disqualification period is in place for all felonies for which neither the permanent bar or 15-year disqualification applies.
The seven-year disqualification exists for all misdemeanors related to financial services.
An individual who has been convicted of a crime involving dishonesty or breach of trust is prohibited from engaging in the insurance business. Violation of this law can result in imprisonment up to five years and a fine of $5000.
Steps to Regain Qualification
After the disqualification period, the burden is on you as the applicant to demonstrate that you have been rehabilitated, are not a risk to the insurance-buying public, and are trustworthy to engage in the insurance business.
Even after the time limit has expired, if you have been convicted of an offense involving dishonesty or breach of trust from a financial relationship you continue to be prohibited by federal statute 18 USC 1033 from seeking an insurance license.
You will be denied licensure unless you obtain a 1033 waiver following an offer of employment.
Typically, a state insurance commission will conduct a waiver review to determine an applicant’s suitability for licensure.
The waiver review usually consists of the following:
- Documents relating to the felony
- Nature and severity of the felony
- Period of time since the felony
- Number of felonies or other similar incidents
They will consider the circumstances surrounding the crime and the relationship of the crime to the practice of insurance sales.
The state insurance commission will also look at your activities since the completion of the sentence for evidence of rehabilitation. This will include:
- Participation in treatment
- Payment of restitution
- Other rehabilitation
Can You Run a Background Check on Yourself?
Doing a background check on yourself before applying for an insurance license will allow you to know exactly what will be discovered when the insurance commission does a background check.
We recommend that you run a background check on yourself. There are resources for that purpose.
If you are interested in obtaining a license as a life insurance agent, you must be honest in disclosing all information. A felony that isn’t revealed but is discovered on a background check is fraud, punishable by possibly being sent back to prison.
Remember that you don’t have to be defined by your crime. We are not defined by our mistakes but in how we recover from them. You can live an honest life, no matter how challenging it may seem.
What do you think about this blog post? Have you or someone you know been in the situation of trying to become a life insurance agent with a felony? What was that like, and what happened? Please tell us in the comments below.