The Black American Guide To Navigating Life Insurance With A Criminal Record

The Black American Guide To Navigating Life Insurance With A Criminal Record


Photo: RODNAE Productions, Pexels

Did you realize that a criminal record can affect one’s ability to obtain life insurance? 

All life insurance applicants are asked about their criminal history, and the answers influence eligibility for a life insurance policy and how high the rates will be.

Former felons can apply for a life insurance policy, but each application and rates are examined on a case-by-case basis. A person with multiple offenses or with histories of alcoholism, drug abuse, or violent behavior will typically be declined for life insurance. Misdemeanors or lesser infractions tend not to change your premium rate. A felony conviction, however, can make it more difficult and more expensive to get life insurance, Policy Genius reported.

People who have an active life insurance policy when they are convicted of a crime can retain their coverage as long as the premiums stay up to date.

For people who have served their time, it is best to wait a period of at least a year before applying for life insurance. And if someone is on probation or parole, life insurance companies most likely will not approve the police because there is a higher risk of ending up back in jail, Quotacy reported.

More than half of released prisoners are rearrested within three years of release, according to the Bureau of Justice Statistics.

People who are in prison already can forget about life insurance coverage–they are too high of a risk.

“We do not offer life insurance coverage to any incarcerated individual… our underwriter feels this is industrywide, Janet Gillespie, a spokeswoman for Prudential, told Bankrate.

Takes a significant number of people who go without insurance– U.S. state and federal correctional facilities held an estimated 1,215,800 at year-end 2020, according to the Bureau of Justice Statistics.

While African Americans own more life insurance policies than their white counterparts, they then tend to have less coverage. Many African Americans consider life insurance as a means to cover funeral costs instead of as a wealth asset, though that is changing, say experts.

But incarceration can play another part in the coverage amount. African Americans are more likely than white Americans to be arrested, according to the Sentencing Project. And, they are more likely to be convicted. They are also more likely to experience lengthy prison sentences.

The stats show that African-American adults are 5.9 times as likely to be incarcerated than whites. As of 2001, one of every three Black boys born in that year could expect to go to prison in his lifetime, the Sentencing Project found.

Former felons are most likely to receive lower insurance coverage. This is how incarceration rates factor in the the overall picture of coverage amounts in the Black community.

Photo: RODNAE Productions, Pexels, https://www.pexels.com/photo/a-person-in-orange-shirt-with-tattooed-arms-6069351/