Last Updated: September 2020
Securing a decent policy from top life insurance companies after a recent bankruptcy can be difficult if you use the wrong company.
We’ve helped dozens of consumers who were previously declined or postponed life insurance secure life insurance after a recent bankruptcy by just doing our research.
And we’ll share that with you below.
- Life Insurance After Bankruptcy
- Best Life Insurance Companies After Bankruptcy
- The Current Status Of Your Bankruptcy Makes A Big Difference
- Work With An Independent Life Insurance Agency To Obtain Life Insurance After A Bankruptcy
Life Insurance is Boring. Let’s Get To The Root Of It! Here are the key takeaways…
You can obtain life insurance after a recent bankruptcy. It will depend on whether it was a chapter 7,11 or 13 bankruptcy. It will also depend if the bankruptcy has been discharged and if payment obligations are being satisfied.
Life Insurance After Bankruptcy
Life insurance after bankruptcy often leaves many consumers worried to even apply in the first place.
It is a common belief that if you apply for life insurance coverage after a bankruptcy that you have no chance at being approved which couldn’t be further from the truth.
Sure, it can definitely be more difficult at times to be approved for coverage depending on the exact circumstances with your bankruptcy.
However, the overall approval odds and approvals at favorable rates are very good.
All you need to do is understand that an independent life insurance agency is ultimately your best option and that you should be comparing options with as many companies as possible before ultimately making any decisions.
Here is a look at some of the companies we have used at Rootfin in the past to help individuals secure coverage after a bankruptcy.
Best Life Insurance Companies After Bankruptcy
Below is a list of 18 life insurance companies and how they view bankruptcy.
If you’ve had a recent bankruptcy, run an instant quote on the right and compare the top rates to the companies listed below to see if you can qualify.
Keep in mind that an agent will have to write a cover letter explaining the bankruptcy and the details of it – so make sure you work with someone trustworthy.
Simply going off the guidelines below doesn’t guarantee you’ll get the rates.
Now, let’s take a look at some of the best options and companies to consider after a previous bankruptcy.
Chapter 7: No coverage for a min of 2 yrs, after discharge for term products—for any forms of BK
Chapter 11,12 an 13: Will consider once PI is making regular debt payments and financial data supports a total line of coverage
Multiple BK’s: PP until 60 months for term coverage, 24 mos for permanent coverage, after full discharge, regardless of BK type.
All forms must be discharged. Face amounts over $250K will definitely be reviewed for BK history.
Face amounts less than $250K “may not”.
Chapter 7: Must be discharged.
Chapter 11, 13: Guidelines say they will postpone any pending bankruptcy until it has been discharged, but Chapter 13 can be considered on a case by case basis with full details of financial situation.
Ch 7: Postpone until discharged
Ch 11, 13: Must have proof of court-ordered payment plan and payments must have been made for at least 2 years
Multiple BK: then individual consideration
Ch 7: Must be discharged.
Ch 11, 13: Individual consideration; payment plan must be established; will look closely at the number of payments and current income
Multiple BK history: Regardless of type, must be discharged; and 2yr pp from discharge
Ch 7: Can consider after the bankruptcy is discharged (no particular waiting period) assuming stable employment and income, no lifestyle or medical/psych concerns.
Ch 11, 13: May be able to consider prior to discharge. Each risk would need individual consideration, but the expectation would be that the insured is well into his/her payment plan.
Multiple BK History: Individual consideration.
Ch 7: Must be discharged…and currently employed and stable
Ch 13: Reduced amounts of insurance may be considered depending on need and financials available after filing
Multiple BK: all forms of BK need to be discharged and a 1 yr postpone from discharge date.
All Chapters: the general rule on a single bankruptcy, Ch 7, 11, or 13, is one year out from discharge.
On the more simple bankruptcies, sometimes will consider sooner. Especially the Ch 7’s.
Multiple BK: 3 yr pp from discharge
All forms need to be reviewed on a case by case basis, but will not consider until fully discharged.
Mutual of Omaha
Ch 7: Must be discharged
Ch 11/13: Individual consideration subject to the following requirements:
– 6 mos from date of the original petition, and accepted by the court
– Insured has current earned income
– No prior bankruptcy
– No current treatment or history of mood disorders, alcohol, or substance abuse.
Multiple BK: All would need to be postponed until discharged
Ch 7: Must be discharged
Ch 11& 13: A Chapter 11 or 13 Bankruptcy that has a payment plan in place, amount that is reasonable, gainfully employed, financially justified, etc. can be given consideration even if the terms of Chapter 11 or 13 are not fulfilled completely yet.
If a case with Chapter 13 that has not been discharged (payment plan paid off) is sent to reinsurance for facultative consideration, they may not participate.
Multiple BK’s: May require additional information and would be handled on an individual basis
All forms of BK, need to be discharged…w/ no, postpone period after…even if the history of multiple BK’s, still OK after discharge.
Ch 7: Postpone for 2 yrs after discharge (consideration possible) – admittedly not competitive.
Ch 11 & 13: Postpone for 6 mos past filing date, assuming the payment plan has been OK’d and on track making payments.
Multiple BK’s: Individual consideration.
All forms must be postponed until 12 mos after discharge
Ch 7: Postponed until discharged
Ch 11 & 13: Postponed until the payment plan has been established and a majority of the debt has been repaid; should be close to being discharged, and showing good income and stable employment
Multiple BK’s: Postponed if within 2 yrs of last discharge and individual consideration
Ch 7: OK, once discharged
Ch 11 & 13: Needs to be fully discharged…simplified or fully underwritten
Ch 7: Must be discharged, and a 2-year postponement; although individual consideration can be made on a case by case basis if within the 2 yrs
Ch 11 & 13: Guidelines are for needing discharge and 2-year pp, although individual consideration can be made on a case by case basis, (once payment plan has been established for 3-6 mos)
Multiple BKs: all must be postponed 2 yrs
Ch 7: Will allow coverage, once discharged (no waiting period)
Ch 11: Postponed until the restructure plan receives court approval and financial statements demonstrate successful turn-around of the company
Ch 13: Can consider once a repayment plan has been established however amount considered may be limited depending on financial information.
Multiple BK’s: Subject to 2-5 year waiting period
The Current Status Of Your Bankruptcy Makes A Big Difference
Clearly, after seeing some of your options above, it is clear that the status of the bankruptcy makes a significant difference in your ability to obtain coverage at decent rates.
It should be at the top of your priority list to make sure you are getting your bankruptcy in order and abiding by all conditions of the bankruptcy.
This is going to make the process much easier moving forward when you are obtaining life insurance.
Work With An Independent Life Insurance Agency To Obtain Life Insurance After A Bankruptcy
At Rootfin, we have helped countless consumers obtain life insurance after a previous bankruptcy.
Coverage is available for those of you with previous bankruptcies and you can obtain it at great rates.
Ensure you work with an independent life insurance agency who can present you with plenty of options.
This is ultimately going to ensure that you are obtaining the best coverage at the best price.
If you’re currently going through a Chapter 7 bankruptcy and haven’t been declined coverage, there is one company not mentioned below that will write you.
They don’t require a medical exam either. Please contact us for rates and the name of that company.
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