Buying life insurance if you have a criminal record

A criminal conviction on your record can limit your options — and hike up your rates significantly.

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Elderly woman getting a mugshot taken

Most life insurance companies don’t care about misdemeanors or infractions on your record. But they do care about felonies. While a felony can make it challenging to buy coverage, the timing and severity of the crime matters.

How life insurance companies treat criminal records

Life insurance companies treat criminal records on a case-by-case basis. When you apply for life insurance, you’ll be asked a few questions about your criminal history.

These might include:

  • Are you currently charged with a felony? If so, you won’t be able to apply for coverage until the charges are dismissed or the trial is over.
  • Do you have a felony conviction to your name? The insurance company will investigate your past conviction along with the other information in your application.
  • Are you on probation or in jail? If you’re in jail, you can’t apply for life insurance. And if you’re on probation, you’ll need to wait at least one year.

It’s important to be honest. Once you submit your application, your insurer will cross-check the data you provided with public records. If they discover you lied or withheld information, they’ll automatically decline your policy.

Insurers categorize applicants with criminal records as high-risk. As a result, they may raise your rates or deny your coverage altogether.

Why felons are classified as high-risk applicants

Life insurance is all about calculated risk. Some of the reasons why felons pose a risk to insurers include:

  • Impact of incarceration on the applicant’s wellbeing. Insurers look at whether the applicant suffers from trauma, health or stress-related conditions.
  • Higher risk of drug or alcohol abuse. Substance abuse is closely linked to incarceration. In 2004, the Canadian Centre on Substance Abuse and Addiction (CCSA-CCLAT) reported that 7 out of 10 prisoners in the federal correctional system had unhealthily used alcohol and other drugs during the year leading up to their incarceration.
  • Increased chance of re-entering the prison system. Though data on the effectiveness of Canada’s correctional system is challenging to obtain, a 2019 study by Correctional Service Canada (CSC) showed that 23.4% of inmates end up being reincarcerated within 2 years after being released. While not indicative of how the majority of prisoners will fare, these statistics work against people with felonies on their records.

What questions will an insurer ask about my felony?

Once you’ve admitted to a felony in your application, your insurer will likely ask the following questions:

  • What type of felony were you charged with?
  • How severe was the crime?
  • How long ago was it?
  • Did you serve jail time? If so, how long were you incarcerated?
  • Was there a probation period?
  • How have you changed your life since the felony?
  • Have you committed more than one crime?

Which felonies are deal breakers for life insurance companies?

If you have one of these convictions, you won’t be able to purchase a traditional policy:

  • Murder
  • Rape
  • Driving while intoxicated or under the influence (DUI)
  • Assault
  • Kidnapping
  • Drug trafficking

Which felonies are not viewed as harshly?

      On the other hand, insurers tend to be more lenient with these crimes — provided enough time has passed:

      • Larceny
      • Property crimes

        How to buy life insurance if you’re a felon

        If you’ve been convicted of a felony, you’ll face a few obstacles when buying life insurance. The biggest one is your criminal record. Unlike a credit history, it never goes away — so you’ll always pay more for coverage.

        Unless you have a severe felony on your record, that doesn’t mean life insurance is completely inaccessible. These are your options:

        Hold off on buying a traditional policy for as long as possible

        You’ll need to wait at least a year after your probation period to apply for a policy. But if you can wait longer, that’s even better. That way, you’ll put some distance between you and the felony, and give yourself the time to prove that you’re turning your life around. For example, a felon who has been a law-abiding citizen for 5 or 10 years will be deemed a much lower risk than one who was only released from prison a year ago.

        Though life insurance rates rise with age, you’ll pay an even higher premium if you apply for a policy close to your probation period.

        If you need life insurance but you’re only a year out from probation, your best bet is to purchase a short-term policy, such as an annual renewable term life policy. You can then reapply for a different, cheaper policy later on.

        Pro tip: Write a cover letter

        Underwriters want to see that you’ve changed your lifestyle and are making better choices. To prove that, include a cover letter with your application.

        Start by taking full responsibility for the conviction. Then, explain how you’re turning your life around after the felony. Maybe you’ve gotten a stable job, enrolled in an educational course or are serving the local community in some way. If you’ve completed court-mandated programs, mention those too.

        Purchase a guaranteed issue life insurance policy

        Think of this as a “no questions asked” policy. Guaranteed issue policies skip the medical exam and health questionnaire. Most insurers won’t ask about your criminal history, either.

        While guaranteed issue policies are ideal for those who won’t qualify for traditional policies, they’re the most expensive type of coverage. Plus, they’re typically capped at low amounts, like $50,000. If you have a family to protect or outstanding debt, this may leave you underinsured.

        Choose insurers that cater to high-risk applicants

        Some insurance companies specialize in high-risk applicants, like seniors, smokers and those with pre-existing conditions. This category also includes people with a criminal conviction on their record.

        Insurers also have different underwriting standards, which is why it’s key to get a quote from a handful of insurance companies. To get the strongest possible policy and premium, consider working with a life insurance agent or broker. They’ll be able to narrow down your options and direct you to companies that are likely to offer you coverage.

        Opt into group life insurance

        If your employer offers life insurance as part of its employee benefits, check out the policy. Typically, group plans are open to anyone — regardless of their age, health or history. They’re also limited to small amounts, but some coverage is better than nothing.

        Keep in mind that most group life insurance isn’t portable. If you change jobs, you’ll probably need to find another policy.

        Buy an accidental death and dismemberment policy

        This policy pays out if you die or are seriously injured in an accident. It won’t pay out if you die from an illness, disease or underlying medical condition. While it’s not life insurance, it’s a way to leave money to your beneficiaries if you’re in a fatal accident.

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        Bottom line

        A criminal record can make it difficult to buy life insurance. If you committed a severe crime or multiple crimes you’ll likely be denied coverage. Otherwise, insurers will look at how much time has passed since the conviction, and how you’ve rehabilitated.

        If coverage is within your reach, get the best possible deal by comparing life insurance companies.

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