Image of a life ring with money in it and the caption "life insurance for felon's, life is good till your dead."

Like anyone, felons should strongly consider purchasing a life insurance policy, especially if they have loved ones they wish to cover financially, should anything bad happen to them. But how do felons obtain life insurance? Is the process to get life insurance different if one has a criminal background? Any which type should they get? This article will try to answer those questions!

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Life Insurance For Felons

The basics for felons needing life insurance.

If a felon is looking for life insurance, there are a few factors the life insurance company may take into account. Mainly, these factors will be: the crime itself and the severity of it; the number of crimes and frequency of them, if it occurred more than once; and the time which has passed since the occurrence of the crime.

In terms of the amount of time which has elapsed, just know that you may have to wait a year or two from the date of the crime before being eligible to buy a typical policy. But in the meantime, most companies will sell you an Accidental Death and Dismemberment policy, or a Guaranteed Issue Life insurance policy. Once the prerequisite waiting period is over, you should be able to obtain a standard coverage policy.

Risk and life insurance for felons

But actually a lot hinges on the company itself. As with any type of insurance, a company has to weigh their risks. They are in business to make money, not pay out on claims. If a person is considered a high risk, then they feel the odds may be too great to cover that person. Felons are considered high risk liabilities and most companies are hesitant to take on such a customer. But…not every company uses the same math to determine what is considered “high risk.”

As mentioned above, they’ll all look at the type of felony, the frequency, the time elapsed…but they will not all weigh those factors the same. That’s why it is important to seek out a company which has experience giving life insurance coverage to felons. Do your research and find a company friendly to your needs…but make sure you are not overpaying for that premium!

How to look less “high risk”

Apart from finding a friendly company, you can also take steps to appear less “high risk,” and thus improve your odds of getting insured. What were the exact circumstances of your crime? Can you explain these to the insurance agent? Have you taken any positive steps to rehabilitate? What were they, and how can you prove them?

Let’s consider an example: a felon is convicted of drug, but they enrolled in a recovery program and have been clean for months, have a regular job, and no other reports of misdeeds. The insurance company needs to know these things, to make a more favorable decision.

As the expression goes, time heals all wounds, and time can help you appear less high risk if a few years have passed since your conviction…so long as nothing has occurred in the meantime.

But if you are still within the one year period, you may notice that most companies will deny you. This doesn’t mean you should get discouraged, but just understand you may have to continue to wait and in the meantime, take what you can get–the Accidental Death or Dismemberment (AD&D) policy or a Guaranteed Issue Life insurance policy.

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AD&D (Accidental Death or Dismemberment)

AD&D gives a payout if the death is a result of an accident, but of course it will not pay if the death occurred due to criminal activity. By the same token, and as the name suggests, it won’t pay out for death by natural causes…only by accidents. So it is not the best policy out there, but until you qualify for a fuller policy, AD&D is an option to consider, especially if you are under 40.

Life Insurance if over 40 years old

Generally persons over 40 or so may wish to consider Guaranteed Life insurance. This type of policy has few restrictions to get accepted, but…if the insured person does happen to die, the policy issuing company will wait to pay out the entire benefit for up to four years. Essentially they “grade” the payments, meaning the payments increase as the third or fourth year after death approaches. So make sure you and your loved ones ask plenty of questions about benefit payments, prior to buying such a policy. Like AD&D, it isn’t the best policy option out there, but it may be a one to take temporarily, until you qualify for something better.

You are not alone

Believe it or not, nearly a third of the US adult population has some sort of criminal record. So insurance companies realize this fact, and must be flexible when deciding who to accept and who to decline coverage to. Once a convicted felon has done their time and come back to society, they need coverage like anyone else. The problem is, their past follows them and one of the ramifications of that is, it’s hard to regain trust, especially from companies who stand to lose money on the gamble.

Just be honest, and remember to do everything you can to prove you have changed your lifestyle, maintained good health (if your health suffered in any way due to prior habits or due to incarceration), are proactive in preventing any contraction of disease, are avoiding any potential relapse into drug or alcohol abuse (if that was an issue before), and, in general, are living a careful and safe life, reasonably free from any increased odds of death due to high risk activities.

No matter how much effort you put into proving the above, bear in mind that statistically, over half of all felons commit a new crime within three years of release. Further, the odds of a felon being injured or dying in the commission of a crime is also substantial. For these reasons alone, companies are going to truly be cautious when reviewing a felon’s application.

Type of felony conviction

Some convictions will stand out more than others. The main reasons for felony conviction in general are drug abuse, property crimes, DUI, larceny, and assault. Clearly, of these, the one insurance companies lose the most sleep over is drug-related offenses because of the horrible effects of drugs on a person’s health and also because of the high rate of recidivism due to addiction. Note, by and large, marijuana use is considered far less worrisome than harder narcotics.

Aside from drug abuse, companies frown upon issuing policies to anyone convicted of “murder, rape, drug-trafficking, kidnapping, and child molestation.” Indeed, many companies will either require a 10 year waiting period, or in some cases, will simply refuse to ever issue a policy to a convict whose crime fell into one of the above categories.

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Final notes

As you can imagine, the younger a felon applicant is, the better their odds of obtaining life insurance than someone older, or someone who has perhaps spent decades in prison. But no matter what age you are, don’t give up hope. Keep looking, keep applying, and keep keeping your nose clean and your head up. If the large companies continue to deny your application for life insurance, consider a smaller independent agency.