Life Insurance For Felons: Is It Possible?

Life insurance is a complex topic, and having a felony charge on your record can make it even more challenging to navigate. While it is possible for individuals with a felony conviction to obtain life insurance, it's important to recognise that this may impact their eligibility and insurance rates. The type of felony, the time since the conviction, and the number of offenses all play a significant role in the approval process.

Lying about your criminal history will get your application rejected

Lying about your criminal history on a life insurance application is a form of life insurance fraud, and the insurance company has the right to decline your policy if they discover this. Other insurers will then be able to see that you were denied coverage, and they may be less likely to consider your application in the future.

Insurance companies will cross-check the information you provide with public records, so it's important to be honest and provide any relevant details about your criminal history when applying for life insurance. If your application is approved and you fail to disclose the extent of your criminal history, it can prevent your beneficiaries from receiving your death benefit.

Additionally, if an insurance company approves your application and later discovers that you lied or omitted critical information, they have the right to reduce your beneficiary's death benefit or even deny the claim entirely. Therefore, it is always best to be honest about your criminal history when applying for life insurance.

While having a felony on your record may make obtaining life insurance more difficult and expensive, it is not an automatic disqualifier. Some companies are willing to extend coverage to people with criminal records, and working with an independent insurance agent or broker can help you find the right provider and policy.

If you had life insurance before your felony conviction, it's best to continue those payments

If you had life insurance before your felony conviction, it is in your best interest to continue those payments. This is because life insurance providers consider a felony conviction a high-risk factor, and your application for a new policy is likely to be rejected. While some providers may offer coverage, you will have to shop around and may have to settle for a lower amount.

Life insurance is an important asset for long-term financial planning, and it is a way to protect your loved ones by providing them with financial support after you are gone. It is a contract between a policyholder and an insurance company, where the latter pays out a death benefit when the insured person passes away. The death benefit can be used to cover mortgage payments, everyday bills, and children's education expenses.

If you already have a life insurance policy in place, it is crucial to continue making the payments to ensure that your beneficiaries receive the financial support they need in the event of your death. By maintaining your current policy, you can avoid the challenges and limitations that come with obtaining new coverage as a felon.

Additionally, it is important to note that the impact of a felony on life insurance eligibility varies depending on the type and recency of the felony conviction. The longer the time since your conviction, the more likely you are to qualify for traditional life insurance. Therefore, by continuing your current payments, you can secure coverage for your loved ones, even with a felony on your record.

Group life insurance is an option if your employer offers it

If you have a felony record, your employer offering group life insurance is a good option to get insured. Group life insurance is a term life policy offered by employers to their employees. This means that all employees are accepted, regardless of their criminal history. However, it is important to note that group life insurance is often not portable, so if you leave your job, you may lose your coverage.

Group life insurance through your employer typically provides coverage amounts that are capped at low amounts, such as one to two times your annual salary. For example, if your salary is $50,000 per year, your employer's group policy might provide a life insurance payout of $50,000 or $100,000. The coverage is generally guaranteed issue, which means you don't need to take a life insurance medical exam or answer health questions to qualify.

Since employers usually cover the premiums for group life insurance, and you won't be declined for coverage because of your criminal history, it is a good option to get insured as a felon. Make sure to fill out any required forms by the provided deadline and name a life insurance beneficiary. Otherwise, the policy payout will automatically go to your estate, spouse, or other relatives as determined by law and may be subject to probate.

While group life insurance can provide basic coverage, it might not be sufficient for your needs. The coverage is usually tied to your job, and if you leave your employer, you may not be able to take the policy with you. Additionally, the coverage amounts tend to be low, and the premiums are not fixed, increasing over time. If you have dependents or significant financial obligations, you may need to consider supplemental coverage.

If you are denied coverage, consider guaranteed issue life insurance or simplified issue life insurance

If you have a felony on your record, you may be denied life insurance coverage. However, this does not mean that there are no options available to you. You can consider guaranteed issue life insurance or simplified issue life insurance.

Guaranteed issue life insurance

Guaranteed issue life insurance, also known as guaranteed acceptance life insurance, is a permanent life insurance policy that does not require a medical exam or health questionnaire. This type of policy guarantees approval and is ideal for individuals with serious medical conditions or advanced ages that put traditional life insurance out of reach. The coverage amounts are typically much lower than traditional life insurance, usually ranging from $2,000 to $25,000, and there is usually a waiting period of two to three years before the benefits take effect. During this waiting period, if the policyholder passes away due to non-accidental causes, the beneficiaries will not receive the death benefit but will be refunded the premiums paid with interest. The policy is generally available to individuals between 50 and 80 years old.

Simplified issue life insurance

Simplified issue life insurance is another option that does not require a medical exam, but it usually requires answering a health questionnaire. It is offered as a term life policy rather than a permanent one, and the terms and premiums are often more favourable than guaranteed issue life insurance. The approval process is quick, and you may even get approved for a policy in minutes. However, the coverage amount may be smaller, with many companies capping coverage at $40,000 to $50,000. The premiums are typically higher compared to traditional term life insurance or whole life insurance.

Both guaranteed issue and simplified issue life insurance policies can provide an alternative for individuals with felony convictions who are seeking life insurance coverage. It is important to note that these policies may have higher premiums and lower coverage limits compared to traditional life insurance policies.

Working with an independent insurance agent who works with multiple companies is recommended

If you have a felony record, it is recommended that you work with an independent insurance agent who works with multiple companies. This is because insurance companies view people with felony convictions as high-risk, and some won't offer coverage. An independent agent will be familiar with the market and will know which companies are more likely to offer coverage. They can assist in choosing the best provider and policy for your circumstances.

Each insurance company has its own eligibility rules for applicants with felony records, and an independent agent will be able to navigate these varying criteria. For example, some companies may require that a certain number of years have passed since the conviction, or that the applicant hasn't been on probation or parole for a specified number of years. The type of felony will also be a factor, with violent crimes or repeated felonies making approval unlikely.

An independent agent will also be able to guide you through the application process, which can be complex when it comes to disclosing your criminal history. Being honest and providing all relevant details is crucial, as insurance companies will cross-check the information with public records.

If you are unable to qualify for traditional life insurance, an independent agent can advise on alternative options, such as group life insurance or guaranteed issue life insurance.

Frequently asked questions