Life Insurance For Incarcerated: Is It Possible?

Life insurance is a challenging topic, especially when it comes to incarcerated individuals. The reality is that most insurance companies will not provide coverage to someone they deem high-risk. This means that if you or a loved one is currently serving a prison sentence, obtaining life insurance is highly unlikely. The primary reason for this reluctance is the increased risk factors associated with incarceration, including limited financial means and a shorter life expectancy compared to other applicants. However, it's important to note that this doesn't make it impossible, and some options may be available, albeit with limitations.

Life insurance for felons: options and eligibility

Life insurance for felons is a challenging but achievable goal. While most insurance companies are hesitant to take on former inmates as clients, it is not impossible to obtain coverage. Here are some key things to know about options and eligibility for life insurance for felons.

How a Felony Impacts Your Life Insurance

Having a felony on your record can make it more difficult to obtain life insurance. The severity of the crime, the time since the conviction, and any history of substance abuse or violent behaviour will all be considered by insurance providers. If your case involves repeated offences or serious charges, an insurance company may reject your application outright. It's important to note that most companies will only consider applicants who are no longer incarcerated.

Applying for Life Insurance as a Felon

When applying for life insurance as a felon, it is crucial to be honest and upfront about your criminal history. Insurance companies will typically ask a series of questions to assess the risk, including the type of felony, the severity of the crime, any incarceration or probation periods, and any steps taken towards rehabilitation. Background checks are standard, and providing false information will likely result in automatic denial.

Improving Your Chances of Obtaining Life Insurance as a Felon

To improve your chances of obtaining life insurance as a felon, consider the following steps:

• Disclose your felony conviction: Honesty is essential when filling out the application. Provide accurate information about your criminal history to build trust with the insurance company.
• Shop around: Different insurance companies have varying underwriting guidelines, so it's worth exploring multiple options to find a company that may be more lenient or understanding of your circumstances.
• Work with an insurance agent: An experienced agent who specialises in high-risk cases or has knowledge of working with felons can guide you through the process, help you find suitable options, and advocate for you.
• Show rehabilitation efforts: Highlight any positive changes and rehabilitation efforts, such as completing educational programs, counselling, or community service. This can help mitigate the insurer's concerns about risk.

Life Insurance Options for Felons

While traditional term and whole life insurance policies may be available to felons, they will likely come with higher premiums due to the increased risk perception. Here are some alternative options to consider:

• Group life insurance: If your employer offers life insurance as an employee benefit, you may be able to enrol in this policy. These policies often don't require the same level of medical or criminal history disclosure, making it easier for felons to obtain coverage.
• Accidental Death & Dismemberment: While not exactly life insurance, these policies can provide financial relief to family members in the event of your accidental death or serious injury.
• Guaranteed issue life insurance: Also known as guaranteed life insurance or guaranteed acceptance life insurance, this policy doesn't require health screenings or detailed criminal history. It typically has a lower death benefit and is more expensive than other options.

Case Studies

To illustrate how life insurance for felons can work in practice, let's look at a few case studies:

• John, a 40-year-old man with a felony conviction from five years ago, opts for guaranteed issue life insurance with a $50,000 death benefit. He pays a monthly premium of $150, ensuring his family's financial protection.
• Sarah, a 35-year-old woman with a non-violent felony conviction from eight years ago, secures a 20-year term life insurance policy with a $250,000 death benefit. The company considers her rehabilitation efforts and offers rates slightly higher than standard. She pays a monthly premium of $80.
• Mark, a 50-year-old man with a felony conviction from 15 years ago, chooses graded benefit life insurance with a $100,000 death benefit. This policy has a waiting period of two to three years, after which the full death benefit becomes payable. Mark pays a monthly premium of $120.

In conclusion, while life insurance for felons comes with unique challenges, it is possible to obtain coverage by understanding the options, being honest about your history, and working with knowledgeable insurance agents.

Can you get life insurance before going to prison?

Yes, it is possible to buy life insurance before going to prison. However, there are several factors that make it challenging to obtain coverage, and the options available are often limited.

Firstly, most well-known insurance companies are reluctant to provide coverage to individuals deemed as "high-risk," and those with a criminal record or facing incarceration typically fall into this category. This perception of risk is based on the assumption that the policyholder is more likely to engage in risky behaviours or have a shorter life expectancy. As a result, insurance providers may deny coverage or charge significantly higher premiums to mitigate their potential losses.

Additionally, some state laws restrict the type of insurance that companies can sell to incarcerated individuals, further limiting your options. If you are able to find a company that offers coverage, the policies are usually designed to cover only burial and other end-of-life expenses, with a maximum coverage amount of around $25,000. These policies often come with age restrictions as well, being available only to individuals aged 50 or older.

The process of obtaining life insurance before going to prison can be complex and time-consuming. It is advisable to be honest and upfront about your situation when applying for coverage, as providing false or incomplete information may result in automatic denial or future complications with your policy. Working with an independent insurance agent or broker who has experience in this area can increase your chances of finding suitable coverage.

While it is possible to obtain life insurance before incarceration, it is important to manage your expectations due to the challenges and limitations inherent in the process.

What happens to existing life insurance policies when incarcerated?

If you already have life insurance and are then incarcerated, your policy will remain in force as long as your premiums continue to be paid. Typically, there is no clause in the policy that terminates it because of incarceration. This means that, whether a family member is paying the premiums or they are auto-drafted from the policy owner's bank account, the policy will remain in force.

However, if you are looking to get life insurance on someone currently in prison, you will encounter many obstacles. Most insurance companies will not approve life insurance for inmates, deeming the risk too high. This is partly because most life insurance companies require a medical exam, and a paramedical examiner is unlikely to go into a prison to take the necessary samples.

If you have been released from prison, your chances of obtaining life insurance are better, but it can still be challenging. Some companies may view your charges as a risk factor, making it potentially expensive and difficult to get insured. However, it is not impossible, and there are steps you can take to improve your chances of getting coverage.

Improving chances of securing life insurance post-incarceration

Life insurance companies evaluate the risks of individuals who apply, and the risk of insuring someone in prison is deemed too high to take on. However, if you are no longer incarcerated, there are steps you can take to increase your chances of obtaining life insurance.

Understand and mitigate risk factors

Firstly, it is important to understand how insurance companies view the risk you pose. People who have been incarcerated are generally considered high-risk liabilities, and insurance companies are hesitant to take on such policyholders. However, each company assesses risk differently, and there are ways to reduce the risk that insurers perceive. Be upfront about your history and have the details of your incarceration readily available. The following factors are typically considered when determining a person's risk profile:

• The severity of the crime
• The frequency of criminal activity
• The amount of time that has passed since the conviction

Research insurance carriers

Insurance companies all weigh risk using their own set of metrics, so they may not all reach the same decision when determining whether or not to insure someone with a felony. It is advisable to research each carrier and their guidelines before requesting a quote to set your expectations. Working with a licensed insurance agent or broker who is knowledgeable about insurance providers that offer coverage to felons can be helpful.

Consider alternative options

If you are unable to obtain traditional insurance, you may want to consider a guaranteed issue policy, which offers coverage without considering your criminal history. However, these policies are usually more expensive than other life insurance options. Another alternative is group life insurance, which is often offered by employers as part of their benefits package. These policies typically do not require the same level of detailed medical or criminal history disclosures as individual policies, making it easier for felons to obtain coverage.

Burial insurance for inmates

Burial insurance is a type of whole life insurance policy with a death benefit ranging from $5,000 to $30,000. People buy this type of policy to provide money for funeral and burial costs for themselves and their loved ones, reducing the financial burden during a difficult time. Burial insurance is accessible to most people, including seniors and those with cancer, and can be purchased after answering a few health-related questions on the application, without undergoing a medical exam.

However, when it comes to inmates, the situation is more complex. Most insurance companies will not approve life insurance for inmates due to the high risk associated with insuring someone in prison. The challenge of obtaining burial insurance for inmates is further compounded by the requirement of a medical exam, which typically involves taking samples, a process that is not feasible within a prison setting.

For individuals seeking burial insurance for someone currently incarcerated, the roadblocks are significant. The best option may be to wait until the person is released from prison, as their chances of obtaining insurance improve, albeit with potential challenges and higher premiums due to the associated risk factors.

Upon release from prison, individuals with felony records can take specific steps to enhance their prospects of securing burial insurance. These steps include understanding and mitigating perceived risk factors, researching insurance carriers that may be more lenient, and considering alternative options like guaranteed issue policies. Demonstrating positive changes, such as maintaining a steady job and avoiding additional charges, can also increase the likelihood of a favourable outcome.

It is important to note that each insurance company assesses risk differently, so it is advisable to work with a licensed insurance agent or broker who is knowledgeable about insurance providers that offer coverage to former inmates. This expertise can be invaluable in navigating the complexities of obtaining burial insurance for this specific demographic.

Frequently asked questions