We’ll be the first to admit that when it comes to explaining why most life insurance companies choose to “discriminate” against those who have a felony or multiple misdemeanors on their record, we sometimes have a hard time fully understanding their rationale ourselves.
But we here at InsuranceBrokersUSA…
Don’t make the rules, we just “play” by them. Which is why we’ve chosen to work with dozens of different life insurance companies so that when we have client who has been convicted of a felony or misdemeanor in the past, we’ll “tend” to have several options to choose from.
Now will we be able to help out everyone?
No, unfortunately there will be cases in which we simply won’t have any options to choose from, particularly if the client has just recently applied with another company and has been denied.
Which is why…
We’ve chosen to write this article so that we can “shed” a little light on what the process of applying for life insurance with a felony will look like as well as provide a few “tips” which could mean the difference between getting insured for coverage vs being denied.
FELONIES, MISDEMEANORS AND LIFE INSURANCE
First of all, it’s important to understand that simply having a felony on your record won’t automatically mean that you won’t be able to qualify for a traditional term or whole life insurance policy.
It only means that it’s going to make it MORE difficult to qualify for a traditional term or whole life insurance policy.
It also means that you’re going to want to be certain that you choose to apply with an insurance company that is going to be more lenient towards those with previous felonies.
LIFE INSURANCE WITH MISDEMEANORS
A single misdemeanor usually isn’t going to prevent you from being able to qualify for a traditional term or whole life insurance policy. It’s just when you have multiple misdemeanors on your record, or you’re currently on probation due to a misdemeanor where we’ll begin to run into a problem.
So… if this describes your situation, you’ll definitely want to be careful when choosing which life insurance company you ultimately decide to apply with and be sure that you let your agent know about your current situation so that they can “potentially” avoid any unnecessary denials on your record.
WHY FELONIES MATTER.
In our experience, here at InsuranceBrokersUSA, we’ve found that “felonies matter” because insurance companies want to avoid ANY unnecessary risks. A “unnecessary risk” would include insuring someone who has recently:
- Been diagnosed with cancer.
- Suffered from a heart attack.
- Or just received a liver transplant.
- Etc… ect…
But not all risks center around health-related issues. You see insurance companies also want to “avoid” (or at least charge more premium) for those who:
- Love to skydive.
- Or work in the logging industry.
- Or travel to destinations.
But that’s not all, insurance companies are also concerned about “unnecessary” risks that could be avoidable such as:
- Multiple moving violations or DUI’s on their driving record.
- And felony or misdemeanors.
Now in the case of the last two, if after getting multiple tickets or a DUI or after being convicted of a felony, you have decided to “change your ways” that’s great! The only problem is, insurance companies don’t have a way of knowing this other than seeing a documented history of improved behavior.
And unfortunately this takes time.
Now will all felony or misdemeanor charges be treated the same?
No, in fact, what we’ve found is that over the years, life insurance companies have begun to view felonies in different ways. Which means that it’s certainly possible that “one” insurance company may reject you based on their “view” of a particular type of felony, while another insurance company may view the same felony in a different way and accept it.
Other factors that will come into play regarding your felony will include:
- When your felony occurred.
- The type of felony it was.
- Do you have multiple felonies on your record?
- Did you serve prison time?
- Are you currently on probation?
And since these are the most important factors when it comes time to determining how an insurance company is going to “view” your situation, we figured we’d just go into a bit more detail on each potential “road block” you might encounter during your application.
The felony type is the main determinate in whether your life insurance application will be accepted or rejected. Because you’ll be considered a “higher risk” with more severe offences on your record, you should be prepared to accept the fact that insurance companies will usually ask more questions based on how “serious” your offense was.
For example: if you were convicted for drug use, you will need to show some positive improvements like rehabilitation.
The list below are crimes that are most likely going to rule you out from qualifying form most traditional term or whole life insurance policies. In the event your felony falls into any of the categories your best and last option is to pursue an alternative life insurance policy like a guaranteed issue life insurance policy (which we offer as well):
- Drug Trafficking
- Child Molestation
- Or conspiracy to commit any of the above.
Insurance companies are also going to want to know how long your sentence was or whether you didn’t serve anytime at all and this is done to determine the gravity of the offense.
In cases like these, you’ll find that life insurance companies will differ from each other but most companies require that you must have been out of prison for a minimum of over two years and you must not be on probation. If you have exceeded this time frame chances are that your application will be much easier to process.
As a general rule of thumb, if it has been long since your last felony, your chances of being able to qualify for a traditional term or whole life insurance policy will increase greatly.
FELONY WITHIN THE PAST CALENDER YEAR.
In our experiences here at InsuranceBrokersUSA, life insurance companies are not going to be interested in insuring anyone who has been convicted of a felony within the past year. These individuals will simply need to wait at least one full calendar year from the time of their conviction until they then may become eligible for coverage.
If you fall under this category you might want to look at accidental death insurance or a guaranteed issue life insurance policy.
As the name implies if you take an accidental death insurance you beneficiary will be covered and provided for in the event you die in an accident. Meanwhile if you take a guaranteed issue life insurance it means that you can’t be rejected buy you will also need to wait a period of time until your guaranteed issue life insurance policy begins covering your for “natural” causes of death as well.
BEING SMART WITH YOUR APPLICATION.
Having the above information in mind if you believe that normal life insurance is possible with a felony charge please read on. If after all this you are not sure about the next steps to take, don’t worry about it! That’s what we’re here for.
Here at InsuranceBrokersUSA, we know that not everyone is perfect! In fact, according to recent studies it has been found out that 32% of Americans have some form of criminal records, therefore your “problem” isn’t all that unique and rare! It’s also something that we’re quite familiar working with.
As discussed earlier life insurance companies are quite reluctant to insure felons because of the potential lifestyle, diseases that can be contracted within the prison walls, relationship between prison/felonies and drug/alcohol abuse, stress of incarceration leading to health problems, and the increased chance of accidental death.
But the biggest problem is re-incarceration. Because over 50% of all felons are repeat offenders, life insurance companies are very cautious about giving a life insurance.
It is not uncommon for people with a criminal record to be rejected by life insurance companies. If you were rejected on your first attempt, it is normal, try again until you find the right company that will forgo what happened in the past as long has you have made an effort to change.
FINDING THE RIGHT AGENT.
Working with an agent who has experience helping folks with a “criminal” background could make all the difference in the world. So… if your agent isn’t sure, he or she can help you, move on… because the last thing you want to do is apply for coverage and get denied because that “denial” could be what prevents you from qualifying for another policy later on.
AVOID CAPTIVE AGENTS.
Be careful of agents that have a limited reach. For example, which agent do you think will most likely have an viable option for you, the agent that has one or two different life insurance companies to choose from or the agent that is going to search several dozen different insurance companies?
The Perfect Agent will be one that…
Can provide you with the dozens of quote from and biggest names in the industry. They’ll be sure to ask you a “ton” of questions before making their recommendations so that they can help provide you with the greatest opportunity for success.
For instance, your “perfect agent” will need to know what type of crime you were convicted of. Was it:
- drug trafficking,
- Or another serious offense?
Because if so, these types of felonies may automatically disqualifies you for an traditional term or whole life insurance policy. If you fall under this category consider a simplified issue or guaranteed issue life insurance.
Also, your “perfect agent”…
Will also want to know the severity of the crime because minor felonies and white collar crimes are not much of a problem to carriers. If the frequency of the felony is low say it was a one-time thing and it was a long time ago it will be an added advantage.
Finally, your “perfect agent”…
Will want to know about the steps you have taken to improve yourself after been incarcerated. Keep in mind that regardless of how long it has been the felony will always be considered when you apply for a life insurance.
LIFE INSURANCE WITH A FELONY RATE.
Irrespective of how agents help you with your application process, they can’t reduce the premium rates you will pay. For a number of year’s felons might be expected to pay a higher premium fee because they are considered as high risk clients.
Even if you can prove to them that you are not much of a risk, you are still considered a high risk compared to someone that has a clean record. But don’t fret, because in addition to searching for which company is going to approve you for coverage, we’re also going to be looking for which company is going to also offer you the best price!
So, what are you waiting for? Give us a call today and see what we can do for you!