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.
Can I qualify for life insurance with a criminal record?
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.
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 five or ten 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.
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 $25,000 or $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.
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 2005, the Bureau of Justice reported two-thirds — 68% — of inmates were dependent on or abused alcohol or drugs.
- Increased chance of re-entering the prison system. Over 80% of prisoners released in 2005 were arrested at least once in the nine years following their release, according to the Bureau of Justice. About 44% were arrested within the first year of release. While they’re not overarching, 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 dealbreakers for life insurance companies?
If you have one of these convictions, you won’t be able to purchase a traditional policy:
- Driving while intoxicated or under the influence (DUI or DWI)
- 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:
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.