Potential clients locked away from advisors

by Will Ashworth15 Jun 2015
With the third season of Orange is the New Black launching on Netflix Friday, a discussion around this particular group of insured is definitely timely.

"I don't know of a single insurance company that would issue a policy to someone in prison, even those in a 'country club' or less restrictive prison," says Jack Dewald, president of Agency Services Inc., a life and health insurance brokerage in Memphis, Tennessee. "That's just not the kind of risk that the industry would take."

Bankrate.com raised the hypothetical question of whether prisoners can get insurance in anticipation of the popular show’s third season.

While it’s highly unlikely that any insurance company would issue a new policy to someone behind bars, that doesn’t mean that they wouldn’t continue coverage on a policy that existed prior to an inmate’s incarceration.

"That is typically exercised when somebody is really sick and has run out of COBRA (extended group coverage under federal law) and can't acquire life insurance through normal means," Dewald says. "I suppose most of that could be converted, even if you were in prison."

Another situation where insurance is obtainable would be for rich people doing a stint for some white-collar crime such as Martha Stewart. In most cases the premiums would be sky high and likely only for accidental death coverage.

“With felons, you run up against that unknown moral factor,” says Ted Tafaro, CEO of Exceptional Risk Advisors, a provider of specialty insurance. "Life insurance is a privilege and not a right. Jail pretty much kills the opportunity to purchase coverage."