Felons Could Pay Twice as Much for Life Insurance

Clearsurance.com recently released a guide to life insurance for felons. It discovered that convicted felons may have to pay higher rates for life insurance than average. Some may even have premiums exceeding $250 monthly.

If the felony directly impacts life expectancy risk, felons could pay twice as much for coverage or may not be eligible. 

Insurers Who Cover Felons

Many factors contribute to a person’s risk profile, and whether or not an insurer will underwrite a policy, a criminal history is one of them.

Most insurance companies do not have a blanket exclusion for felons. Instead, they use formulas to calculate how specific felonies impact risk. They also consider the number of convictions and the number of years since the last.

When an insurance company determines a felon’s risk profile is insurable, they will underwrite a policy. 

Insurers Will Access Background Information

Some convicted felons may consider withholding information concerning their criminal past, but that could have serious consequences.

If an application questionnaire isn’t answered truthfully and the insurer discovers the discrepancy in a background check, they may refuse to offer a policy.

Even if an insurer doesn’t discover a felony record, they may deny a claim upon finding out that the application was founded on inaccurate information.

Criminal Information Insurers Collect

According to Clearsurance.com, insurance providers will consider the answers to the following factors when determining eligibility and premiums:

  • Nature of the felony
  • Number of felonies and misdemeanors
  • Years since conviction

Insurers may also ask additional related questions to gain more information:

  • Application or reception of disability insurance benefits
  • Current status of awaiting charges or on parole
  • Driving record risks
  • Employment status
  • History of drug or alcohol abuse
  • Hospitalizations within the past two years

Some of these contributing factors could make it more or less likely to be offered a life insurance policy. For example, if a felony isn’t a major felony, an applicant will be more likely to be offered a policy. But if an applicant will likely go to jail or prison, it’s unlikely that an insurance company would assume that risk by writing a policy.

Types of Life Insurance for Felons

In many situations, felons will qualify for term and permanent life insurance options. 

Term life insurance is the most cost-effective type of policy and is recommended as the most straightforward way for adults to provide for their dependents in the event of their untimely death. The downside to term life insurance is that once the term expires, there is no coverage.

Permanent life insurance costs more for less coverage, but as long as the premiums are paid, the policy will last through a person’s entire life.

Cost of Life Insurance for Felons

Different insurance providers calculate the risk of felonies differently. While some felonies may have little impact on rates, they’re not going to help applicants obtain lower premiums. 

Age makes a big difference in the cost of insurance. A 45-year-old should expect to see rates at least 30% higher than a 35-year-old. 

The following factors will also affect life insurance rates for felons:

  • Current tobacco use 
  • Previous tobacco use
  • Drug use
  • Alcohol dependence
  • Health history
  • Family history

The lower a person’s risk of dying, the lower the insurance premiums will be.

Car Insurance for Felons

Several car insurance companies accept felons. In fact, a history of one or more felonies won’t impact car insurance as significantly as life insurance. If the felony is unrelated to driving risk, it may not affect car insurance premiums at all. However, if the felony is for repeated DUIs, a driver may be unable to find auto insurance.

Felons can usually find good car insurance rates the same way as everyone else. They should compare rates, research top contenders’ financial stability and customer satisfaction ratings, and switch to the best provider for their situation.

Felons May Still Find Affordable Life Insurance 

While many insurance providers will offer policies to convicted felons, the premiums may be significantly higher than they would be without a criminal conviction. Finding affordable coverage may still be possible and is worth pursuing. 

Read Clearsurance.com’s entire article here: Life Insurance Companies That Accept Felons: What to Know.


More from this Author