Life Insurance And Felons: Can They Sell Policies?

Life insurance agents sell policies that pay out to beneficiaries when the policyholder dies. They also sell annuities that promise a retirement income. To become a life insurance agent, applicants must meet several qualifications, including being at least 18 years old, a U.S. citizen, and having a high school diploma. They must also pass a licensing exam. While a college degree is not required, it is preferred. Each state has its own licensing requirements, which may include background checks. Certain felonies, such as first-degree felonies, capital felonies, and those involving money laundering, fraud, or financial services, will permanently bar individuals from applying for an insurance license. Other felonies may require waiting periods before individuals can apply for a license. Can a felon sell life insurance? Let's find out.

What is a life insurance agent?

A life insurance agent is a licensed professional who sells insurance policies to clients on behalf of one or multiple insurance companies. They are either "captive" agents, meaning they sell insurance from only one company, or "non-captive" agents, meaning they represent multiple insurance carriers.

Life insurance agents meet with potential clients, gather information about their personal life, such as marital status, occupation, and income, and analyse expenses, savings, and income to provide a quote on a life insurance policy. They are paid a percentage of the premium on the policy purchased.

To become a life insurance agent, applicants must be at least 18 years old, a U.S. citizen, have a high school diploma, and reside in the state where they want to become an agent. While there is no required degree, some employers in the industry prefer a college degree, especially in business or management, as it provides a background in marketing, economics, and finance. Candidates must also complete a life insurance pre-licensing education program and pass a state-administered licensing exam.

What are the requirements to become a life insurance agent?

To become a life insurance agent in the US, applicants must meet several requirements. Firstly, applicants must be at least 18 years old, a US citizen, and have at least a high school diploma or GED. While a college degree is not mandatory, some employers in the insurance industry prefer candidates with a degree in business or management, as it provides a background in relevant areas such as marketing, economics, and finance.

Secondly, candidates must complete pre-licensing education requirements, which vary from state to state. Most states mandate a certain number of classroom hours, typically ranging from 20 to 50 hours, and completion of an accredited school insurance program. This pre-licensing education can usually be obtained through community or public technical colleges, or private education providers.

Thirdly, applicants must pass a state licensing exam. The content of the exam differs depending on the state but generally covers state insurance laws, insurance concepts, and category-specific topics such as life insurance, health insurance, and annuities. Some types of life insurance may also require securities registrations, such as the Series 6 or Series 7 qualifications administered by the Financial Industry Regulatory Authority (FINRA).

Finally, candidates must complete the necessary background checks and fingerprinting, which are required by most states. This process involves submitting fingerprints to the FBI Criminal Database to check for felony convictions. It is important to note that certain felonies may disqualify an applicant from obtaining a license, while others may require a waiting period before applying.

Is a license required to sell life insurance?

Yes, a license is required to sell life insurance.

To become a life insurance agent, applicants must meet several 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. While there is no required degree, some employers in the insurance industry prefer a college degree, especially in business or management.

In addition to these basic qualifications, candidates must complete a life insurance pre-licensing education program. The number of classroom hours varies by state but is typically between 20 and 50 hours. Completion of an accredited school insurance program is necessary and can be found at community colleges, technical colleges, or private education providers.

After completing the required education, candidates must pass a license exam that covers state insurance laws and category-specific insurance concepts. Each state has different licensing requirements for insurance agents, and these requirements depend on the type of insurance being sold. Life and health insurance agents, for example, must pass a licensing exam that covers life insurance, health insurance, and annuities.

Some types of life insurance may also require securities registration, such as a Series 6 or Series 7 qualification. These exams are administered through the Financial Industry Regulatory Authority (FINRA).

Once licensed, life insurance agents must complete continuing education requirements, which vary by state. This typically includes a background check, which may or may not include fingerprinting.

The process of obtaining a license to sell life insurance can be complex and varies depending on the state. It is important to check the specific requirements for the state in which you intend to practice.

What felonies disqualify you from selling life insurance?

In the US, each state has its own insurance agent licensing requirements, which can include background checks with or without fingerprinting. Fingerprinting is typically part of the background check, with fingerprints run through the FBI Criminal Database to look for felony convictions.

If you have committed any of the following felonies, you will be permanently barred from applying for a license to sell life insurance:

• First-degree felony
• Capital felony
• Felony involving money laundering
• Fraud or embezzlement
• Felony directly related to financial services

The permanent bar applies regardless of whether adjudication was withheld or your civil rights have been restored.

Other felonies that require a waiting period before you can apply for a license include:

• All felonies involving moral turpitude that are not specifically included in the permanent bar (15-year disqualification)
• All felonies for which neither the permanent bar nor the 15-year disqualification applies (7-year disqualification)
• All misdemeanors directly related to financial services (7-year disqualification)

An individual who has been convicted of a crime involving dishonesty or breach of trust is prohibited from selling life insurance. Violation of this law can result in imprisonment of up to five years and a fine of $5,000.

After the disqualification period, the burden is on you as the applicant to demonstrate that you have been rehabilitated, do not pose a risk to the insurance-buying public, and are trustworthy.

What are the steps to regain qualification?

The steps to regain qualification to sell life insurance after a felony conviction vary depending on the state and the nature of the conviction. However, there are some general steps and considerations that apply in most cases. Here are the key steps to regaining qualification:

• Complete any required waiting or disqualification periods: The length of the waiting period will depend on the type of felony committed and the state in which you reside. For example, certain felonies, such as first-degree felonies, capital felonies, or felonies involving money laundering, fraud, or embezzlement, may result in a permanent bar from applying for a license. Other felonies may have a 15-year or 7-year disqualification period. It is important to check the specific requirements for your state.
• Demonstrate rehabilitation: After the disqualification period has ended, the burden is on the applicant to prove that they have been rehabilitated, do not pose a risk to the insurance-buying public, and are trustworthy enough to engage in the insurance business. This may include providing documents relating to the felony, participating in treatment or rehabilitation programs, and demonstrating positive lifestyle changes.
• Obtain a 1033 waiver: If you have been convicted of an offense involving dishonesty or breach of trust from a financial relationship, you may be prohibited by federal statute 18 USC 1033 from seeking an insurance license. In such cases, you will need to obtain a 1033 waiver following an offer of employment. The state insurance commission will typically conduct a waiver review to determine your suitability for licensure.
• Complete pre-licensing education and pass the license exam: To become a licensed life insurance agent, you must complete pre-licensing education and pass a license exam covering state insurance laws and insurance concepts. The pre-licensing education requirements vary from state to state, but typically involve completing an accredited school insurance program and a certain number of classroom hours.
• Meet general requirements: In addition to the above steps, you must also meet the general requirements for becoming a life insurance agent, such as being at least 18 years old, a U.S. citizen, having a high school diploma or equivalent, and residing in the state where you plan to sell insurance.

It is important to note that the process of regaining qualification to sell life insurance after a felony conviction can be complex and may vary depending on your specific circumstances. It is always best to consult with an attorney or your state's Department of Insurance for guidance on your individual situation.

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