Life insurance may seem impossible for those with a criminal record, particularly a felony. But is it that difficult? Let’s learn.
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After all, most people with felonies do not like to talk about their criminal past, especially when applying for loans, jobs applications, and life insurance. So, it is not surprising that many with a criminal past believe their felony record prevents them from getting life insurance.
The truth is otherwise, as while having a felony means you present a higher risk, it does not necessarily preclude getting life insurance. Many people who have felonies have been able to obtain affordable life coverage, which provides peace of mind for them and their families.
Table of Content
Why Insurance Companies Balk at Covering Felons?
Getting life insurance when convicted of a felony may not make sense to some individuals. This is especially true if the felony was an isolated incident seemingly unrelated to the risk of you passing away.
For example, being convicted of theft may seemingly present no danger to your life compared to having a medical condition.
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However, the truth is:
All felony convictions are viewed by insurance companies as a valid risk, even when they occurred years ago. Behavior is a substantial factor for insurance companies to consider when approving life coverage. This means that behavior that puts your life at risk, such as a felony conviction, is viewed in a negative light.
Life Insurance Coverage
While it is true that some insurance companies may view those with a felony record as being too risky to get coverage. It is also true that obtaining life insurance means considering several factors, with a felony past being one of them.
Remember that:
In many cases, a felony is viewed much like a serious health condition or engaging in hazardous activities like skydiving or scuba diving. However, other factors go into a felony conviction that you must know about before applying for life insurance.
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Nature of Conviction:
Not all felonies are alike, which means that a person convicted of one crime may not be considered as high risk by insurance companies compared to another crime. In fact, most felonies are drug and alcohol-related, the most common included in the following;
- Drug Abuse
- Theft
- DUI or DWI
- Larceny
- Assault
Drug abuse, intoxicated driving, and many assault felonies are related to drug and alcohol abuse. These behaviors represent a real risk to insurers, even without a felony conviction. For those who engage in drug and alcohol abuse, a related felony conviction will automatically put you in a higher risk category.
If you qualify for life insurance, you will pay a higher rate than someone who does not abuse drugs or alcohol. Pushing it to a felony conviction will only increase the rates, especially in your recent past.
White-Collar Crimes:
Non-drug-related and non-violent felonies, such as fraud, are viewed differently than other types of felonies. Depending on the insurance company, felony convictions of this nature are still considered risks but not as substantial as actions that put your life in danger.
Note that.
You may find that with non-violent felony convictions, the penalties are substantially less and, depending on when it occurred, will have minimal impact on getting life cover. However, some insurance companies will have blanket policies regarding any criminal conviction, so bear in mind that you may have to wait a pre-set period before getting coverage.
Can you get life insurance for someone in jail?
In addition to drugs and alcohol, insurance providers do not want to insure someone more likely to go to prison and inmates. Going to prison means a whole new set of issues, not to mention the inability of many prisoners to pay for their life insurance premiums, resulting in cutting off coverage.
Worse, with many prisons representing a higher risk to life compared to living on the outside, it means an increased risk for insurance companies.
Since people who have committed a felony in the past are more likely to commit another one, this represents an additional consideration for approval. Plus, a higher risk for the insurer itself.
Non-Drug & Alcohol-Related Crimes:
Interestingly, a felony conviction for assault, vandalism, or larceny in which drugs and alcohol played no role represents a lower risk, as seen by insurance companies. This means that obtaining life insurance for these types of felonies is not seen nearly as risky. Plus, the difference in terms of the rates may be minimal, especially if the crime occurred several years ago.
Wait Time:
Although the policies of individual insurance companies may differ, for the most part, you must wait at least two years from the end of your sentence or probation before you can become eligible for life insurance with the aforementioned felony convictions.
If it has been over two years and you are still being declined, you should broaden your search for insurance providers because they may offer you coverage. This means that after two years, you should be able to obtain life insurance from at least one or more companies.
Additional Factors
When insurance companies are informed of a felony conviction, they will ask certain questions about which impact getting coverage and how it affects your premiums.
Some of the questions may include the following;
- How long ago was the felony?
- Were you incarcerated?
- How long ago did you leave prison?
- Did you serve probation or get parole?
- When did the probation or parole period end?
As a general rule, the longer the time has passed since your probation, parole, or time in prison ended, the better the chances of getting approved for life insurance coverage.
Of course, the nature of your conviction will also have an impact, such as possession of marijuana being considered less serious than cocaine or heroin. In addition, not spending time in prison will also be considered in terms of getting a life policy.
Felonies that Preclude Life Insurance Coverage
As mentioned earlier, not all felonies are alike. This means that some convictions will carry less risk than others. However, there are also felony convictions severe enough to preclude coverage altogether. In most cases, if you have been convicted of one or more felonies, you will need to wait 10 years to get life insurance.
- Child Molestation
- Drug Trafficking
- Kidnapping
- Murder
- Rape
In addition, if you are convicted of conspiracy in any of the aforementioned crimes, you are considered just as risky as if you committed the crime yourself by insurance companies.
You will sometimes not be covered even after ten years, depending on the circumstances. You will need to consult with a concerned agent about the chances of getting coverage if you have a felony conviction.
Alternatives
If your felony conviction precludes you from ever getting life insurance, you have alternatives that may work for your situation. The two most popular are accidental death and final expense insurance.
Accidental death insurance:
This covers you if you pass away due to an accident, such as a car accident or similar situation. It does not cover in case of death by disease or medical condition, such as a heart attack, stroke, diabetes, or cancer.
However, if you only need a smaller policy, say $100,000 – $200,000, the insurance agent will probably advise you to get an accidental death policy.
You may be wondering..why?
This is because the paperwork and approval needed for an accidental death policy is far less compared to life insurance. This is because the insurance is based on a pre-set series of incidents, not dying from most causes.
For younger, healthier individuals with a felony conviction, an accidental death policy of $200,000 may have rates not much higher than if you did not have a felony conviction.
Final expense insurance covers your burial, which offers a far lower benefit threshold than standard life insurance but does cover funeral expenses. This means that your passing does not have to burden your family financially.
Most final expense insurance covers $10,000 to $50,000, which may mean having some leftovers for your family.
So, Can You Get Life Insurance With A felony?
Yes, it is possible to get life coverage. Depending on the nature of your conviction, you will have to wait from two to ten years after probation ends before you can apply for life insurance.
However, remember that many companies will offer some coverage after the required time has passed. Furthermore, you have options in accidental and final expense insurance that provide affordable options in case life insurance is unreachable or too expensive.
