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Life Insurance with a Felony (or Misdemeanor)

If you have a criminal record, you may find it difficult to get a stable job, housing, and other basic necessities, and obtaining a life insurance policy is no exception.  But even though it may be harder for a person with a criminal record to obtain coverage, the need for it is still there.

In some situations, a compelling case can be made that individuals with previous felonies on their record may have a greater need for a life insurance policy than a “non-felon” applicant particularly because of these added challenges that they already face.

After all, owning a life insurance policy can be a powerful way for a person with a criminal record to take responsibility and make amends for their actions, by providing for their family even after they’re gone. It can also be an act of hope, as it shows that the individual is planning for a future, for themselves, and for their loved ones.

In addition, owning a life insurance policy can be a way for felons to break the cycle of poverty, crime, and instability. You see, life insurance provides resources for family and dependents to avoid falling into the same patterns of crime and poverty that may have led to the felon’s current situation.

It’s important to remember that a criminal record does not have to define a person, and many people who made some poor decisions deserve an opportunity to try and make a better future for themselves and their loved ones.

Even though it may be harder for a person with a criminal record to obtain life insurance coverage, it is possible and it’s important to work with a life insurance agent who can help understand your specific situation and the options available.

With this in mind, let’s now answer some of the most common questions we get asked by applicants with a “less than perfect” past and see what they may or may not be able to qualify for.

Can I qualify for a life insurance policy with a felony on my record?

Qualifying for life insurance with a felony is kind of like trying to get a job as a barista at Starbucks with a mugshot as your profile picture. It’s not impossible, but it’s definitely not going to be easy.

But just like there’s always that one boss who’s willing to give a person with a checkered past a chance, some life insurance companies may also be willing to overlook your past transgressions.

So, in short, can you qualify for a life insurance policy with a felony?

Sure, it’s possible!

But it’s also like trying to fit a square peg in a round hole… it can be done, but it might take a bit of extra elbow grease.  And in some cases, you might have to settle for something less than you originally hoped for.

Can I qualify for a life insurance policy while on parole?

This is a much easier question because when it comes to being on parole, you’re not going to find a life insurance company willing to offer you a traditional life insurance policy.  This is because is viewed as being an unstable situation.

First, because, “active parolees” have a tendency to go back to prison pretty frequently and you can imagine that most life insurance companies don’t want to insure someone while they are in prison.

And secondly, if you are currently on parole, that probably means the crime you committed wasn’t all that long ago.

And like time heals most wounds, time also has a tendency to mature people and make them less foolish as they age (hopefully).  This is why some life insurance companies will limit how far back they’ll look into someone’s past.

How far back will a life insurance company look for a felony or misdemeanor?

Ah, the age-old question of how far back a life insurance company will dig into your past… it’s like trying to remember how much you had to drink at that wild tailgate party from 10 years ago. Some things are best left in the past, but insurance companies have a way of digging them up.

In all seriousness, life insurance companies typically look at an applicant’s past several years when evaluating their application. However, the exact time frame will vary from company to company. Some may look as far back as five to ten years, while others may only look back a couple of years.

In general, the further back the time frame, the more information the insurer will have about an applicant, which can help them make a more accurate risk assessment.

This is why most life insurance companies will ask the question:

“Have you EVER been convicted of a felony or misdemeanor?”

Other insurance companies may take a hybrid approach, by which they will ignore some felony charges after a period of time, but not other more serious charges.  Serious charges such as murder, sexual assaults, etc.

In general, though, the most recent information on one’s record is usually what’s given the most weight, so if you have a spotless record and have been living a healthy and stable lifestyle, the past may not be as much of a concern.

OK, but what happens if I qualify for a life insurance policy, then I get sent to prison?  Will my life insurance policy be valid in prison?

Whether or not your life insurance policy will be valid if you go to prison after you have been approved for coverage will depend on the terms of your policy and the specific circumstances surrounding your imprisonment.

Generally speaking, most life insurance policies will remain in force as long as the policyholder continues to pay premiums and does not commit suicide within the first two years of the policy.

However, if you are convicted of a crime and sent to prison, you may find it difficult or impossible to continue paying premiums.

Additionally, a few policies have a provision where if you are incarcerated, the death benefit will not be paid out, so it’s important to check the terms and conditions of your policy in order to understand what exactly would happen.

“Contestability Clause”

It should also be noted that most life insurance policies will contain a “contestability clause” which states that during the first couple of years that a life insurance policy is in place, the company has the right to investigate whether the contractual agreement was made in good faith.

Now, insurance companies will usually only investigate claims where an insured dies from a natural cause of death shortly after purchasing a new policy to see if the insured intentionally omitted information about their health.

For example, something like they failed to mention that 2 weeks before applying for their life insurance policy they suffered from a heart attack while in Mexico, meaning that there were no records of the incident here in the United States.  Well that would be considered by most life insurance companies as intentional omission or fraud.

Conversely, if an applicant were to be arrested for the manufacturing of a controlled substance 2 weeks after applying for a life insurance policy, it is reasonable to assume that the insurance company might want to reconsider their approval.

Now, does that mean they definitely will?  That’s not something for us to decide, all we can say for sure is that you really ought to be as honest as possible when applying for coverage so that if and when you are approved, your policy will never be in doubt!

What if my felony prevents me from being able to qualify for a traditional life insurance policy?

If your felony conviction prevents you from being able to qualify for a traditional life insurance policy, it doesn’t mean that you’re out of options.

Guaranteed Issue

One possible alternative is to look into Guaranteed Issue life insurance policies. These policies don’t require a medical exam or a review of your criminal history, which makes it easier for people with a criminal record to qualify for coverage.

However, these policies are typically more expensive and offer lower death benefits than traditional life insurance policies and will contain a graded death benefit limiting when natural causes of death will be covered.

Accidental Death Insurance

Another possible solution might be to purchase an accidental death policy which will provide coverage in the event that you die from an accident.

Unfortunately, these types of insurance policies won’t provide coverage for natural causes of death, but they do provide some protection to their insured and can be a great way option for those who may be eligible for traditional coverage later in life (ie:  after they are off parole, or after enough time has passed since their offense).

And there you have it…

Getting life insurance with a felony on your record may seem like a daunting task, but it’s not impossible. Just remember, the key is honesty and transparency.

The insurance company may ask you a lot of questions, but just keep in mind that they’re only trying to get to know you better, and hopefully, insure you for a long and prosperous life.

So don’t be afraid to come clean about your past, because at the end of the day, the most important thing is making sure your loved ones are taken care of in the event of the unexpected.

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