Something many people don’t consider when looking into a life insurance purchase is their criminal record. And qualifying for life insurance with a felony can be very difficult. Yet, it’s not impossible.
Underwriters take the specifics of your felony, especially the type and severity, into close consideration during the application process. The nature of your crime will greatly affect the type of coverage you’ll qualify to receive.
This article will help you sort through the options so you can find the best life insurance policy, despite your felony conviction.
Table of Contents
Roughly one-third of adults in the United States have a criminal record according to the Department of Justice.
The percentage of those who have felony convictions is a bit harder to estimate. The uncertainty comes from the sheer number of crimes committed each year, as well as uneven reporting from state to state.
A rough estimate by the Bureau of Justice Statistics puts the number of American adults who have spent time in prison because of felony convictions at 5.6 million in total.
While many of these felons are still behind bars, others have served their time and re-entered society. A good portion are now leading otherwise normal lives. They work for a living, own homes, and have families. There’s a minimal chance they’ll commit another crime in their lifetime.
Yet, a felony conviction stays on their record forever. The consequences of this are numerous and far-reaching. The one we’re here to talk about today is the difficulty of buying life insurance as a felon.
It’s important to understand exactly what the underwriters at these companies look at in your life insurance application.
Finding life insurance as a felon is difficult. Insuring a felon puts insurance companies at a much greater risk than insuring someone without a criminal record.
A few of the reasons felons are considered high risk by life insurance companies are:
- High risk lifestyle
- Poor health caused by stress of incarceration
- Possibility of diseases contracted in prison
- Greater likelihood of drug abuse and addiction
- Higher chance of accidental death
Yet the most important risk factor insurance providers consider is re-incarceration. A Bureau of Justice Statistics study shows more than half of felons released from prison commit another crime within three years.
Not only is the probability of re-incarceration a risk, so is the chance the felon will die during the related crime.
A few of the factors you can expect to be asked about during the life insurance application process include:
Type of Crime: major felonies (like murder, rape, drug trafficking, arson, etc.) are grounds for immediate denial, while you still may be approved if you were convicted of a minor felony (like burglary, fraud, vandalism, etc.)
Severity of Crime: severe crimes, like the major felonies listed above, are more likely to earn a denial from life insurance companies than less severe crimes
Frequency of Crimes: you have a far greater chance of being denied life insurance if you’ve been convicted for multiple minor felonies
Time Since Crime: minor felonies are looked at less severely the longer ago they happened, so the more time that’s passed since you committed the crime, the better off you’ll be
Current Status: what have you done to rehabilitate yourself since your conviction? For example, completing a drug rehabilitation program is a major plus for those convicted for a drug crime
Other Factors to Consider
It’s also important to note you have a very slim chance of qualifying for life insurance if you’re still on probation.
Most insurance companies wait at least a year or two after probation ends before insuring a felon.
You may not be declined, but rather postponed.
According to the Brennan Center for Justice, there’s no limit on your criminal history. In other words, if you have a felony, it will always be a factor in an insurance company’s decision.
The main decision factor for the carrier in this scenario is how long ago it occurred, and when you completed any jail time or probation.
Other common issues, like bankruptcy, are only a factor for a set number of years (for bankruptcy it’s usually 7 to 10 years). Even health issues become lesser factors to underwriters as time passes between the health episode and the present day.
Finally, each insurance company treats certain crimes differently. The trick will be finding the one who’s most likely to offer you an insurance policy based on your specific circumstances.
More on that below.
Expect to pay more for life insurance after you’ve committed a felony. There’s no getting around the fact felons are almost always going to receive more expensive policy rates.
In fact, consider yourself lucky if you qualify for life insurance with a recent felony conviction. Some people don’t. But you still have options.
Note there will not be a payout if the death, itself, stems from criminal activity or natural causes (in the case of an accidental death policy). These are called exclusions.
Simply put, most felons will be forced to research and apply to several different companies. There’s a good chance you’ll be turned down by at least one before finding a successful match if you do it on your own.
Don’t wait to start researching your options for life insurance after a felony. Your choices are more limited, but you still have plenty of options to choose from.
However, there’s an easier way.
Experienced insurance agents work directly with the best insurance companies and can help you narrow down your choices.
An insurance agent will help you find the best life insurance possible. Not only do they know the companies who are most lenient toward certain crimes, they also know what the underwriters look for in each applicant.
What you can do in the meantime is take steps to show underwriters you’re working to make things right. Rehabilitation classes are an excellent example. Always document everything you’re doing to create a positive track record.
And never, under any circumstance, attempt to hide your criminal record. Be honest and upfront to increase your chances of qualifying for life insurance.