Wallace Group - Insurance Blog

Life Insurance After Bankruptcy

If you have declared bankruptcy, chances are you’ve had to cancel your financial commitments such as life insurance. You’ve probably been wading through a sea of legal jargon, and confusion and now you need some simple answers. Can you be approved for life insurance after bankruptcy? Can you be approved for life insurance during bankruptcy? The answer is yes if you choose the right insurance company.

Risks Associated with Bankruptcy

Insurance companies look at individuals who have filed or are in bankruptcy carefully because the fact is, they are a risk. Mental health, stress, anxiety, depression, and suicide are legitimate factors that are statistically associated with bankruptcy. So even if you are back on your feet and earning an income, your ability to pay your premiums is not the only concern.

Having filed for bankruptcy, you are already in a vulnerable position. Life insurance offers the security that your family will be cared for after your death. It is possible to have life insurance and file for bankruptcy or apply after you have filed, you simply have to find the right insurance company.

Will the Insurance Company Know I’ve Declared bankruptcy?

Yes. When you file bankruptcy, you generate a lot of financial information that will be available to the insurance company. The best advice is to be upfront about your situation and lead with this information. Will this affect your possible approval? Probably, but the good news is, that insurance companies consider a lot of different factors when assessing your eligibility and each case is different. One important factor is which type of bankruptcy you’ve filed for- Chapter 7, 11 or 13. Whether you are currently in filing bankruptcy or have filed in the past will also affect the outcome. For example, if you filed for Chapter 7 bankruptcy, you will have to wait an additional 360 days until you can apply for life insurance. A bankruptcy stays on your credit history for as many as ten years. Living without life insurance for ten years is a risk you don’t have to take when there are insurance companies like who will work with you.

How Can We Help?

The first step is contacting us so we can talk through your specific situation and needs. It is possible to be approved for life insurance after you’ve filed for bankruptcy and to hold onto your policy during bankruptcy. We want to provide you with the information and education you need. Bankruptcy is going to make your life difficult, there’s no doubt about it, but let us show you what’s possible.

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