Life insurance for felons
Millions of Americans are imprisoned each year for crimes ranging from misdemeanors to felonies. The U.S. prison population was 1,204,300 at the end of 2021, a 1% decrease from the previous year, when there were 1,221,200 Americans incarcerated nationwide. Furthermore, many of those incarcerated are parents or guardians of young children. According to the Bureau of Justice Statistics provided by the United States Department of Justice, nearly half of federal prisoners were either the parent, stepparent, or guardian of a minor child from 2018 to 2019.
While it is important for many people to provide financial security to their loved ones through life insurance death benefits, obtaining life insurance coverage can be difficult for those with felony records. The risk of providing coverage to felons can be enough to make many insurance companies reluctant to do so. However, this does not rule out the possibility of obtaining life insurance coverage. Those with a felony record can take steps to improve their chances of obtaining life insurance coverage. Here's what you need to know.
Do life insurance companies check criminal records?
Yes, almost all life insurance companies will look into an applicant's criminal history. Applicants will be asked questions about their criminal history in order to obtain a life insurance policy.
In addition, the life insurance company will almost certainly conduct a background check on you. If your criminal history is discovered during the background check, your policy may be canceled. Being truthful is the best option. If you lie, the lie will be discovered during the background check process and the policy may be canceled.
However, even if you have a felony, you may still be eligible for a life insurance policy, depending on the unique circumstances of your situation and the policies of the insurance company. It is worth noting, however, that if you are able to obtain a life insurance policy despite having a felony, you will most likely face higher premiums due to the higher statistical risk of insuring you.
How to buy life insurance as a felon
Understanding your perceived risk to insurance carriers is the first step in purchasing life insurance. You should also understand what factors insurance providers who offer life insurance products to felons take into account so that you have a better chance of obtaining coverage from a provider who can meet your needs.
Reducing your risk
Inmates are typically regarded as high-risk liabilities, and many insurance companies are hesitant to accept such policyholders as clients. However, each insurance company evaluates risk differently, and there are steps you can take to reduce your risk, such as keeping the details of your incarceration readily available. Typically, the following factors determine a felon's risk:
- The seriousness of the crime committed
- The number and frequency with which crimes are committed
- The amount of time since the crime occurred
Depending on the type of crime committed, you may be able to obtain coverage from a lenient carrier soon after incarceration. Evidence that you have changed your lifestyle, such as a stable job and no new charges, may help to improve your chances of being viewed favorably by life insurance companies.
Finding a carrier
As previously stated, not all insurance companies weigh risk equally. Before requesting a policy, it is critical to conduct research on each carrier. Make sure to approach companies that have experience providing life insurance coverage to felons, as they are more likely to provide coverage.
Alternatively, you might be able to find a carrier by looking for companies that specialize in providing coverage to high-risk applicants. Before making a final decision, obtain quotes from multiple carriers.
Selecting a policy
A guaranteed issue policy may be the best option for obtaining a life insurance policy as a felon. A guaranteed issue life insurance policy provides coverage to policyholders regardless of their medical history or criminal history. However, because guaranteed issue life insurance policies are guaranteed, they are generally more expensive than other types of life insurance, such as term life insurance, and may not be the best option if you are on a tight budget.
How a felony impacts your life insurance
Having a felony on your record can have an impact on your life insurance. If your case is serious or recurring, an insurance company may flatly refuse your application. It is also worth noting that most life insurance companies only consider candidates who are not currently incarcerated. If you are incarcerated or awaiting trial, it is unlikely that you will be able to obtain coverage until your case is resolved and you are no longer incarcerated.
Those with felony convictions who want to buy a life insurance policy may still have options because insurance companies assess risk on an individual basis. This means that each applicant will be evaluated based on their unique situation. You might also think about working with an independent insurance agent or broker who is familiar with the market. They may be able to assist you in selecting the best provider and policy option.
Be honest about your felony conviction when applying for life insurance. Insurance agents frequently compare the information you provide to public records. Any false information you provide will almost certainly result in an automatic rejection of your application.
If your application is turned down, group life insurance through your employer may be an option for you to keep your life insurance coverage. You could also apply for guaranteed issue life insurance until you are eligible for a better policy.
Other options for coverage
In addition to the previously mentioned guaranteed issue life insurance option, felons may be able to obtain life insurance through the following providers:
- Group life insurance: If you can find an employer who provides life insurance as part of its employee benefits package, you may be able to take advantage by signing up for a policy. Because these policies typically do not require the same medical or criminal history disclosures as individual policies, felons can easily obtain coverage. Furthermore, because the cost is shared by a group of people, group insurance rates are frequently much lower than individual policies. It is important to note, however, that group life insurance coverage is typically limited in scope and only covers you for the duration of your employment with the company providing the coverage.
- Accidental Death & Dismemberment: Although not a life insurance policy, accidental death and dismemberment policies may allow felons to provide financial assistance to family members in the event of their death or serious injury. Beneficiaries, on the other hand, will not receive a death benefit if you die as a result of illness, disease, or underlying medical conditions.
Finding life insurance as a convicted felon is difficult, but not impossible. Felons can provide their families with the financial security they require following their death by conducting thorough research, reducing risk, and selecting the right policy. Even if they are unable to obtain an individual policy, a guaranteed issue policy may be an excellent way for felons to obtain coverage.