A provider can legally require an applicant to undergo a physical examination when considering the applicant’s eligibility for life insurance.
Most insurance companies will require that applicants undergo a physical examination by a doctor or nurse, during which urine and blood samples will be taken. The provider will also typically request the applicant’s medical records from their physician.
Can an Insurance Provider Conduct Any Additional Background Checks on the Applicant?
Yes. The provider can look at the applicant’s health history with the Medical Information Bureau, the applicant’s driving record, and whatever other information is relevant to deciding the applicant’s eligibility.
State laws regulate what information a provider may use to assess an applicant’s eligibility for a life insurance policy. Still, the cost-benefit ratio determines how much checking the provider will do. Providers must pay to conduct these background checks, so the number of checks they perform will depend on the size of the policy the applicant is applying for. A provider will research a person seeking a $1,000,000 policy more than a person seeking a $100,000 policy.
Getting Life Insurance With a Criminal Record
Most life insurance policies require you to wait at least a year after your conviction or until your probation period is over if you have a felony on your record.
You can still apply for a life insurance policy even if you have a criminal record. In most cases, having misdemeanors or lesser infractions on your record will not affect your premium rate. It will be more difficult and expensive to obtain life insurance if you have a felony conviction, especially in the first few years after your conviction.
The Importance of Your Criminal Record to Life Insurance Companies
Insurers make best-guess judgments about the likelihood that you’ll die while covered by a life insurance policy using data – scientific studies and actuarial tables.
Data from insurers shows that people with criminal records tend to live shorter lives, especially those convicted of felonies. Also, life insurance companies don’t look at every conviction or criminal record similarly.
Criminal Records and Life Insurance Applications
When you apply for life insurance, you will be asked about your criminal history to find out if you are currently under investigation for a felony or have a felony conviction in the past. Your answers determine whether you qualify for a life insurance policy and how high your rates will be.
Tell the truth about your entire criminal history, including less serious offenses. A life insurance company will review your application thoroughly, so if you lie about your criminal record, they will find out when they run a background check.
In addition, if you lie on your application, the insurance company will decline your application. You can expect other insurers to see your application records in the future, and they will be less likely to consider your application.
Is it Possible to Get Life Insurance While in Prison?
According to the Bureau of Justice Statistics, U.S. state and federal correctional facilities held an estimated 1,215,800 inmates as of year end 2020.
Could they get life insurance after being incarcerated if they didn’t get it before they were incarcerated? The chances are slim. Insurers evaluate the risks of applicants, and insuring someone in prison would be far too risky to take on.
What if You Had Life Insurance Before You Went to Prison?
What if these individuals had life insurance before they were imprisoned? Would it remain in force while they were behind bars?
As long as their premiums are paid, anyone with life insurance who enters prison will continue to have it.
The policy will remain in force as long as they are auto-drafted from the policy owner’s bank account or paid by a family member. In most cases, the policy has no clause prohibiting termination due to incarceration.
Is it Possible to Get Life Insurance While on Probation or Parole?
The further back your indiscretion occurred, the better. A person on probation or parole is more likely to end up in jail, so many life insurance companies will not cover them.
The criminal justice system closely monitors probationers, and any minor violation could send them to jail. The criminal justice system is also supervising parolees, and any minor violation can land them behind bars again.
Over half of released prisoners are rearrested within three years of their release, according to the Bureau of Justice Statistics. The longer you have been off probation or parole, the better your chances of getting approved for life insurance and affordable premiums.
You’ll need some positive attributes to get life insurance with a criminal history.
Among the favorable factors are:
- You’re married.
- You have a job.
- There was only one criminal offense.
- You have served your sentence, including probation or parole.
- No drug or alcohol problems.
- Favorable driving record.
What You Need to Know When Buying Life Insurance With a Felony Conviction
After a conviction for a felony, you should wait at least one year or until your probation period is over before applying for life insurance. If you apply, you will be required to disclose the details of your conviction, and you will likely have higher rates than if you did not have a criminal record.
Look for a Policy as Soon as Possible
Even if getting life insurance can be more difficult in the first one to two years after probation, it’s risky to go without a policy and leave your loved ones without financial protection.
Each insurer has a different waiting period post-probation before accepting life insurance applications. Some insurers accept applications within the first one to two years post-probation, others only accept applications five years post-probation, and a few require applicants to be ten years post-probation.
Apply around 18 months after probation so an agent can help you find the best policy and provider for your needs. Your loved ones will have coverage sooner, and you can apply for a rate reconsideration or purchase a new policy at a lower rate in the future.
Choosing the Right Life Insurance Agent
Insurance companies treat felonies differently, and an agent with market knowledge can help you find the company most likely to offer you the most affordable coverage. The agent may also be able to recommend a broker who specializes in high-risk cases.
Other Options Are Available
If your life insurance application is declined or you are unable to apply for whole or term life insurance, there are two other options:
- Regardless of your health status or criminal history, you may be eligible for group life insurance if your employer offers this benefit. Although most group plans offer less coverage than you need, you can still get some coverage.
- Guaranteed issue life insurance is a type of final expense insurance that does not require a medical exam and does not restrict policies based on a person’s health or criminal history. The premiums for whole life insurance are higher than term life insurance, and the benefit amounts are generally limited to $25,000.
If I Think My Life Insurance Provider Is Going Too Far With Background Checks, What Can I Do?
Suppose you feel your provider is doing background checks that will result in you being unfairly discriminated against in terms of your eligibility for an insurance policy. In that case, you may want to consult an insurance lawyer who is experienced in life insurance matters. Your attorney can inform you of your rights and help you decide what to do next.
Also, suppose your lawyer advises that your provider illegally discriminated against you or your application. In that case, you may also want to file a complaint with your state’s Department of Insurance.