Life Insurance Sales: Felony Impact In Pennsylvania

If you have a felony on your record, some companies will not offer you traditional life insurance, while others might, depending on certain conditions. For instance, some insurers may offer traditional life insurance if the conviction was at least 10 years ago, or 20 years ago for certain crimes. In Pennsylvania, you can obtain a life insurance license if you meet certain requirements, including a background check.

Pennsylvania insurance license requirements

If you want to become an insurance agent in Pennsylvania, you'll need to obtain a Pennsylvania insurance license. Here are the steps you need to take to get licensed:

• Figure out which insurance license you need: The type of insurance policies you want to sell will dictate the type of license you need. For example, you need a Property & Casualty (P&C) license to sell auto, home, or business insurance. Other types of licenses available in Pennsylvania include Life & Fixed Annuities, Variable Life/Variable Annuity, Property & Allied Lines, and Casualty & Allied Lines.
• Complete a pre-licensing education course: Regardless of the insurance line you're applying for, you must complete a pre-licensing education course with a minimum of 24 credit hours. Make sure to keep the course completion certificate, as you'll need it to sit for the insurance exam.
• Pass the relevant Pennsylvania insurance license exam(s): After completing your pre-licensing education, you must pass the relevant exam(s). These exams are multiple-choice and administered by PSI. The cost varies depending on the insurance lines involved, with "single line" exams costing $43 and "joint line" exams costing $53.
• Complete a fingerprint and background check: Submit your fingerprints to the Pennsylvania Insurance Department via Live Scan at an IdentoGO enrollment center. This process costs $27.75 and allows the department to conduct a national criminal history background check to ensure you meet the state's insurance agent requirements.
• Submit your insurance license application: Applications are submitted online through Sircon or the National Insurance Producer Registry (NIPR) and cost $55 for most insurance producer licenses. If you've passed exams for multiple lines of authority, you must submit an application and pay a filing fee for each.

It's important to note that Pennsylvania has state reporting fees, and you may be charged an additional online service fee of around $12.50.

After submitting your application, allow a few weeks for processing and background checks. The Pennsylvania Insurance Department will send you an email regarding the status of your license.

Whether you can obtain an insurance license with a felony depends on the state and the hiring company. In general, applicants with certain types of felony convictions, such as first-degree felonies or those involving money laundering, fraud, or embezzlement, are likely disqualified from getting an insurance license. For other types of felonies, there may be a mandatory waiting period before applying for a license.

If you have a felony conviction, it's best to contact the Pennsylvania Insurance Department for guidance on your specific situation. They can be reached by phone at (717) 787-3840 or by email at [email protected].

Background checks and fingerprinting

In the life insurance field, honesty, integrity, and trustworthiness are paramount. As an insurance agent, you will be working with clients on matters involving their finances, so it is essential that they are able to fully trust you. Before you apply for an insurance license, it is important to be aware that each state has its own insurance agent licensing requirements, which may include background checks and fingerprinting.

Currently, 25 states require fingerprints as part of the background check. This involves running your fingerprints through the FBI Criminal Database to check for any past or present felony convictions. Most other states and the District of Columbia require identification and/or background checks for the past seven years.

The process of obtaining fingerprints for a background check can vary depending on the state. Some states have a fingerprint vendor, where you must go to a physical location to have your fingerprints taken. Other states may take fingerprints onsite at the exam location and process them once you have passed the exam. In some cases, local law enforcement may be authorised to conduct fingerprinting, and you will need to submit your fingerprints with your application. If there are only a few physical locations for fingerprinting in your state, you may be able to get an exception to have local law enforcement take your prints, which you can then mail to the vendor. Due to this, many states have "expiration dates" for fingerprints, allowing applicants to hold onto a sealed envelope of their fingerprint card for a certain period of time while they finish the other pieces of their application.

In addition to fingerprinting, most states will also require you to disclose your criminal history on the insurance license application. This includes any convictions in your adult life that are believed to have been expunged, deferred, or are currently pending. It is important to note that failing to disclose past criminal convictions does not necessarily result in the denial of an application, but providing false or incomplete information on a license application can lead to the license being denied and further action being taken.

While the specific criminal background questions on the application can vary from state to state, most will ask uniform questions covering criminal and felony convictions, administrative action, and child support information. Some states, such as California, have implemented non-uniform background questions that require the disclosure of criminal convictions involving the abuse or oppression of elders and dependents.

It is worth noting that several states have implemented the Ban the Box movement, which removes questions regarding criminal history from the initial application. However, this does not eliminate the background check and fingerprinting requirements. Ultimately, individual insurance companies will make the final decision regarding hiring, so it is recommended to contact the insurance company you plan to work for if you have any questions.

Application process and disclosure

If you have a felony on your record and want to sell life insurance in Pennsylvania, you'll need to go through a licensing process that includes an application, background check, and potential disclosure of your criminal history. Here's an overview of what to expect:

Step 1: Application Submission

The first step is to complete and submit an application for a life insurance producer license with the Pennsylvania Insurance Department. The application will require you to provide personal information, educational background, and employment history. You may also be asked about any prior insurance experience or qualifications you possess. As part of the application, you will likely need to submit fingerprints for a criminal background check. This process will vary slightly depending on whether you are applying as an individual or on behalf of a business entity.

Step 2: Background Check

The Pennsylvania Insurance Department will conduct a comprehensive background check as part of your license application. This will include checking for any criminal convictions, including felonies. Be prepared to disclose your felony conviction during this process. Failure to disclose or providing false information may result in your application being denied or future license revocation.

Step 3: Disclosure and Review

Upon disclosing your felony conviction, the department will review your application and consider the nature and severity of your conviction. They may request additional information or documentation regarding the circumstances of your felony. It is essential to provide honest and detailed information to facilitate a thorough review. The department aims to ensure that individuals licensed to sell insurance demonstrate integrity and honesty.

Step 4: Potential Interview or Hearing

In some cases, you may be required to attend an interview or hearing regarding your application. This step allows the department to gather more information and assess your suitability for a license. During the interview or hearing, you may be asked questions about your felony conviction, including the circumstances surrounding it, and any steps you have taken toward rehabilitation or community reintegration.

Step 5: Decision and Potential Conditions

After reviewing your application, disclosure, and any additional information provided, the Pennsylvania Insurance Department will make a decision regarding your license application. They may approve your license with certain conditions or restrictions, especially if your felony is directly related to financial crimes or fraud. These conditions could include additional supervision, limitations on your scope of practice, or specific requirements for ongoing reporting or compliance checks.

Step 6: License Granting or Appeal Process

If your license is approved, you will be granted the ability to sell life insurance in Pennsylvania, subject to any conditions set by the department. However, if your license is denied due to your felony conviction, you may have the option to appeal the decision. The appeal process may vary, and seeking legal advice could be beneficial to navigate this process effectively.

Felony convictions and insurance coverage

In the United States, individuals with felony convictions may face challenges when applying for insurance coverage, whether as agents or insured parties. The impact of a felony conviction on insurance eligibility can vary depending on the state, the nature of the felony, and the rehabilitation demonstrated by the individual.

Insurance Agents with Felony Convictions

For individuals seeking to become insurance agents, the path to obtaining a license can be more complex with a felony conviction. Most states require background checks, including fingerprinting, as part of the licensing process. Twenty-five states mandate FBI criminal database checks, while others conduct background checks for the past seven years.

The eligibility criteria for obtaining an insurance license vary by state. Certain felonies, such as first-degree felonies, capital felonies, money laundering, fraud, or felonies related to the financial services business, may result in permanent disqualification in some states. Other states may impose waiting periods before individuals with felony convictions can apply for licensure. These waiting periods can range from seven to fifteen years, depending on the nature of the felony.

During the waiting period, individuals must demonstrate rehabilitation, pose no risk to customers, and establish trustworthiness to work in the insurance industry. Ultimately, each state's Department of Insurance provides specific guidance on the likelihood of obtaining an insurance license with a felony conviction.

Life Insurance for Individuals with Felony Convictions

Obtaining life insurance coverage with a felony conviction is possible, but it may be more challenging and require additional steps. Traditional life insurance providers may deny coverage or impose specific conditions. The timeframe since the conviction, the nature of the felony, and the individual's current status regarding probation or parole are crucial factors in the underwriting process.

In some cases, individuals with felony convictions may need to explore alternative options, such as "Guaranteed Issue" life insurance policies or accidental death benefit policies. These policies typically come with higher premiums due to the perceived higher risk associated with insuring individuals with criminal histories.

When seeking life insurance coverage, it is advisable to work with knowledgeable independent insurance agents who have access to multiple carriers and can navigate the process effectively. These agents can guide individuals in determining the best policy for their specific circumstances and assist in making informed decisions.

Auto Insurance and Felony Convictions

Auto insurance, or vehicle insurance, is another area where felony convictions can impact insurance eligibility and rates. Insurance companies consider driving-related offenses, such as driving while intoxicated or under the influence of drugs or alcohol, when assessing risk. These types of infractions can make obtaining auto insurance more difficult and result in higher premiums.

Additionally, individuals currently incarcerated or with recent felony convictions related to vehicle use may face challenges in obtaining auto insurance coverage. However, working with independent insurance agents who specialize in high-risk cases can improve the chances of finding suitable coverage.

The impact of criminal history on insurance rates

The impact of a criminal record on insurance rates varies depending on the type of insurance, the nature of the crime, and the individual's circumstances. Here is an overview of how criminal history can affect different types of insurance:

Life Insurance

Life insurance companies evaluate the risks associated with each applicant, and a criminal record can be a significant factor in their assessment. While a criminal conviction does not automatically disqualify an individual from obtaining life insurance, it may impact their eligibility and the cost of coverage. The severity of the crime, the number of convictions, and the time passed since the conviction are all considered. For instance, multiple offenses or a history of violent behaviour or drug abuse may result in higher premiums or difficulty in obtaining coverage. However, if an individual already had life insurance before being incarcerated, their policy will remain in force as long as the premiums are paid.

Auto Insurance

A criminal record can affect auto insurance rates, but only if the violation is related to the individual's driving record. Driving-related convictions, such as DUI (Driving Under the Influence), reckless driving, or hit-and-run offences, can lead to significant increases in insurance rates. Even a single DUI conviction can result in charges of over $200 per month for auto insurance. Non-driving-related criminal records may still impact auto insurance rates if they reflect on the individual's overall character and responsibility, such as fraud or theft.

Becoming an Insurance Agent

When it comes to becoming an insurance agent, the impact of a criminal record depends on the state and company licensing requirements. Most states conduct criminal background checks and may require fingerprints to verify an applicant's character. Certain convictions, such as crimes of moral turpitude (fraud, dishonesty, or breach of trust), may disqualify individuals from obtaining an insurance license due to the fiduciary responsibilities and trust associated with the role. However, each state has different regulations, and some may allow licensing after a specific waiting period or if the conviction is not directly related to the financial services business.

Frequently asked questions