For those who have a criminal record, particularly a felony, getting life insurance may seem impossible. 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, job applications, and life insurance. So, it is not surprising that many who have a criminal past believe that 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. In fact, many people who have felonies have been able to obtain affordable life coverage which provides peace of mind for them and their families.
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Why Insurance Companies Balk at Covering Felons?
Getting life insurance when you have been convicted of a felony may not make sense to some individuals. This is especially true if the felony was an isolated incident and seemingly not related 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.
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 of life coverage. This means that behavior which 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 for getting coverage. It is also true that obtaining life insurance means considering several factors with a felony past being one of them.
In many cases, a felony is viewed much like a serious health condition or engaging in activities which are hazardous, such as skydiving or scuba diving. However, there are other factors that go into a felony conviction that you will need to know about before applying for life insurance.
Nature of Conviction:
Not all felonies are alike, which means that a person convicted of one crime may not be considered as high a risk by insurance companies compared to another crime. In fact, most felonies are drug and alcohol-related to the most common included in the following;
- Drug Abuse
- DUI or DWI
Drug abuse, driving while intoxicated, and many assault felonies are related to drugs and alcohol abuse. These behaviors alone, even without a felony conviction, represents a real risk to insurers. For those who engage in drug and alcohol abuse, a felony conviction that is related will automatically put you in a higher risk category.
This means that if you qualify for life insurance, you will pay a higher rate compared to someone who does not abuse drugs or alcohol. Pushing it to a felony conviction, especially one in your recent past, will only make the rates go higher.
Non-drug related and non-violent felonies, such as fraud, for example, are viewed differently compared to other types of felonies. Depending on the insurance company, felony convictions of this nature are still considered risks, but not as substantial compared to actions that put your life in danger.
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 when it comes to any type of criminal conviction, so bear in mind that you may have to wait a pre-set period before getting coverage.
Can you get life insurance on someone in jail?
In addition to drugs and alcohol, insurance providers do not want to insure someone who is 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 the life insurance premiums which results 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 their 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 enough, 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.
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 more than two years and you are still being declined, then you should broaden your search of insurance providers because they may offer you coverage. This means that after the two-year period, you should be able to obtain life insurance from at least one or more companies.
When insurance companies are informed of a felony conviction, they will ask certain questions which impact on 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 is considered less serious compared to cocaine or heroin. In addition, not spending time in prison will also be considered in terms of getting 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 of the following felonies, you will need to wait a minimum of ten years to get life insurance.
- Child Molestation
- Drug Trafficking
In addition, if you are convicted of conspiracy in any one of the aforementioned crimes, then you are considered just as risky as if you committed the crime yourself by insurance companies.
In some cases, you will not be covered even after the ten years has passed 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 of this nature.
If your felony conviction precludes you from ever getting life insurance, then you do have alternatives which may work for your situation. The two most popular are an accidental death and final expense insurance.
The accidental death insurance:
This covers you in case 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 and not dying from most causes.
For younger, healthier individuals who have 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 compared to standard life insurance, but it does cover the expenses of a funeral. This means that your passing does not have to place a financial burden on your family.
Most final expense insurance will have coverage from $10,000 to $50,000, which may mean having some left over 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, keep in mind that many companies will offer some type of 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.