‘With felons, you run up against that unknown moral factor”
Life insurers rarely cover inmates in prison, so they are unlikely to leave anything behind but their dead bodies.
“We do not offer life insurance coverage to any incarcerated individual,” said Janet Gillespie of Prudential individual life insurance, according to a June 9 Fox Business website article Does Life Insurance Cover Prison Inmates? by Jay MacDonald. “Our underwriter feels this is industry wide.”
Issuing a policy to someone in prison is “just not the kind of risk that the industry would take,” said Jack Dewald, president of Agency Services Inc., in Memphis, Tenn., according to the Fox article.
Problems insurers cite is that there is no easy way to conduct a health exam on a prisoner, inmate access to financial assets is typically restricted and imprisonment casts broad uncertainty over the motives of both the insured and their beneficiaries. Additionally, there are the inherent dangers that come with being in prison, the uncertain mental health of the population and the “moral hazard” of insuring someone who has run afoul of the law, according to the article.
Inmates in California could overcome some of the obstacles. Inmates can get checkups at their facilities. Copies of their medical records can be released by signing a form, according to California Code of Regulations, Title 15 3261.2 Authorized Release of Information.
In addition, inmates can earn an income sufficient to pay premiums from prison. Wages range from $12-$56 a month for average prison jobs and as much as $153 a month if working for the Prison Industry Authority. “We can make up to 95 cents per hour for an average 34-hour work week,” said Antonio Manning, a PIA worker. Joint Venture and even selling handicraft could also provide sufficient income for prisoners to pay premiums (CCR Title 15, 3104(a) Inmate Handicraft sales).
Also, inmate accounts can function like bank accounts. Inmates can sign trust withdrawals to have checks sent where they want. Additionally, once the inmate registers his or her Social Security number, the State Treasury pays out interest on the funds in his or her account, according to CCR Title 15, 3099 Inmate Trust Accounts.
“We can make up to 95 cents per hour for an average 34-hour work week”
Insurance companies say they are willing to insure daredevils, but not inmates because, “The high-risk element is something we can get our head around because it’s not a moral issue; the guy wants to live and he wants the stunt to go well. With felons, you run up against that unknown moral factor,” said Ted Tafaro, CEO of Exceptional Risk Advisors, a Mahwah, N.J., specialty insurer and Lloyd’s of London underwriter, according to the article.
There are a few exceptions. Those who entered prison with preexisting individual policies in place are guaranteed coverage if they pay their premiums and don’t die while committing an intentional criminal act, expressed Dewald in the article.
Group life coverage through an employer is typically lost unless converted to an individual policy before entering prison, according to the article.
A modest death benefit is available in some states from ProCon Membership Community in West Palm Beach, Fla., for a monthly fee of $9.99 to $12.99, says the article.