Life Insurance Agent: Felony Barriers And Opportunities

If you have a felony on your record, you may be wondering if you can pursue a career as a life insurance agent. The answer is that it depends on several factors, including the state you live in, the company you want to work for, and the type of felony conviction you have. While most states require a background check and have regulations disqualifying individuals with certain types of felony convictions, there are also paths to regaining qualification and joining the insurance industry.

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 can work independently or for an insurance company. Agents work on behalf of the insurance company, while brokers work on behalf of the consumer.

Life insurance agents meet with potential clients and gather information about their personal life, such as marital status, occupation, and income. They then analyze expenses, savings, and income to provide a quote on a life insurance policy. Agents are paid a percentage of the premium on the policy purchased. They might be given a small salary to start with, but they are otherwise primarily dependent on commissions to make a living.

Life insurance agents must complete pre-licensing education, which varies from state to state, and pass a state-administered licensing exam. While the number of classroom hours varies, typically ranging from 20 to 50, completion of an accredited school insurance program is necessary. Licensed life insurance agents must also complete continuing education requirements every few years for licensing renewal.

Life insurance agents must possess certain qualities to succeed in their field. They must be resilient, as they will face a lot of rejection, and have a strong background in sales. They must also be self-starters with a fighting spirit and a love for the thrill of the hunt and the rush of a sale.

What are the eligibility criteria to become a life insurance agent?

To become a life insurance agent, applicants must meet several eligibility criteria. Firstly, individuals must be at least 18 years old, a US citizen or resident of the state in which they intend to work, and have a high school diploma or equivalent. While a college degree is not mandatory, some companies in the insurance sector prefer candidates with a degree, ideally in a related field such as business, management, marketing, or finance.

Secondly, aspiring life insurance agents must complete pre-licensing education requirements, which vary by state. This typically involves enrolling in an accredited insurance program at a community college, technical college, or private education provider, and completing 20-50 classroom hours. Following this, candidates must pass a state licensing exam that covers insurance laws, regulations, and concepts specific to the type of insurance they intend to sell (e.g., life, health, property, and casualty insurance). It's important to note that each state has unique licensing requirements, and some types of insurance may necessitate additional qualifications, such as securities registrations.

Thirdly, individuals must demonstrate certain personal qualities and characteristics to be eligible for a career as a life insurance agent. Honesty, integrity, and trustworthiness are paramount, as agents handle sensitive financial information and are expected to act in the best interests of their clients. A clean criminal record is generally preferred, but it is possible for individuals with misdemeanors or felonies to obtain a license, depending on the nature and age of the conviction, as well as the regulations of the hiring company and licensing state.

Finally, while not a formal requirement, it is beneficial for aspiring life insurance agents to gain on-the-job training or industry experience. Many employers offer training programs to new hires, providing them with the practical skills and knowledge needed to succeed in the role.

Is a license required to become a life insurance agent?

Yes, a license is required to become a life insurance agent in the US. Each state has different licensing requirements, but all life insurance agents must pass a license exam that covers state insurance laws and category-specific insurance concepts.

To qualify for a license, candidates must meet pre-licensing requirements, including completing a pre-licensing education course. The number of classroom hours varies from state to state, typically ranging from 20 to 50. These courses are usually offered by third-party organisations and are either self-funded or paid for by the employer.

In addition to pre-licensing education, candidates must pass a licensing exam. Some states require candidates to apply for a license before taking the exam, while others do not. The exam covers topics such as state rules and regulations, insurance applications, underwriting, policy riders and exclusions, taxes and retirement, and types of policies.

Life insurance agents who wish to sell variable-contract life insurance products or securities must also be licensed by the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA).

What types of felonies disqualify you from becoming a life insurance agent?

While it is possible to become a life insurance agent with a felony conviction, certain felonies will disqualify you from obtaining a license. The specific felonies that result in disqualification vary from state to state, but generally, those that involve financial misconduct or represent a breach of trust will permanently bar you from becoming a life insurance agent. This includes felonies related to money laundering, fraud, embezzlement, or financial services. In addition, each state has its own licensing requirements, which may include background checks and fingerprinting. These checks typically review the past seven years for felony convictions.

If you have committed a felony that does not fall into the categories mentioned above, you may still be able to become a life insurance agent after a certain period. For felonies involving moral turpitude, there is usually a 15-year disqualification period. For other felonies and financial services-related misdemeanors, there is often a seven-year wait. After the disqualification period, you must demonstrate rehabilitation, prove that you are not a risk to customers, and show that you are trustworthy enough to work in the insurance industry.

It is important to note that you must disclose your criminal history on your license application. Failure to do so may result in the denial of your application or legal consequences. Additionally, individual insurance companies will make the final decision regarding employment, so it is recommended to contact the company you plan to work for with any questions.

What are the steps to regain qualification?

If you have a felony conviction, you may be able to become a life insurance agent, but it depends on the type of felony and the state in which you live. Some felonies, such as those involving money laundering, fraud, or financial services, may result in a permanent bar from becoming a licensed agent. For other felonies, there is typically a waiting period before you can apply for a license. This waiting period can vary depending on the nature of the felony and the state's regulations. After the waiting period, you will need to demonstrate that you have been rehabilitated and are trustworthy enough to work in the insurance business. Here are the steps to regain qualification:

• Complete the waiting period: The length of the waiting period will depend on the type of felony and the state's regulations. For felonies involving moral turpitude, there is typically a 15-year disqualification period. For other felonies, there may be a seven-year disqualification period.
• Obtain a 1033 waiver: After the waiting period, you will need to obtain a 1033 waiver, which is a document stating that you have been rehabilitated and are suitable for a license. This waiver can be obtained from the state insurance commission and will involve a review of your criminal record and any rehabilitation efforts.
• Demonstrate good character: To become a licensed insurance agent, you must demonstrate honesty, integrity, and trustworthiness. This can be done through participation in treatment programs, payment of restitution, and other rehabilitation efforts.
• Complete pre-licensing education: To become a life insurance agent, you must complete pre-licensing education, which varies from state to state. This typically involves 20-50 hours of classroom instruction from an accredited school insurance program.
• Pass the licensing exam: All life insurance agents must pass a licensing exam that covers state insurance laws and insurance concepts specific to the type of insurance they will be selling.
• Disclose your criminal history: When applying for a license, you must disclose any criminal convictions, including those that have been expunged or are pending. Failure to disclose this information accurately can result in your application being denied.
• Continue your education: After obtaining your license, you must continue your education and stay up-to-date with any changes or developments in the insurance industry.

Frequently asked questions