25 Jun My dad is going to prison. What happens to his life insurance?

Q. My dad is going to prison for five years. He has life insurance and I’m the beneficiary of his life insurance. He doesn’t have any other assets. Does anything change with the policy because he’s going to be incarcerated?
— Unsure

A. We’re sorry to hear about your family’s upcoming challenges.

Your question is an important one, and it’s all about timing.

In purchasing life insurance, it is important that the insured is candid in completing the application form otherwise the insurance company may have the right to cancel the policy based on misrepresentation or fraud, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

Assuming that the life insurance policy was purchased prior to any indication that your father would be potentially incarcerated, and premiums are continued to be paid, and absent any particular clause in the particular contract relating to incarceration, then, the policy should pay benefits to the named beneficiary upon your father’s death, Romania said.

She said insurance companies issue policies and determine premiums based in part on the timing and risk of payouts.

Going to prison, similar to having certain health attributes, makes the possibility of an early payout more probable, she said, therefore, it’s unlikely an applicant will qualify for life insurance if prison time is imminent.

“For that reason, should your father pass while in prison, the timing of when your father obtained the policy in relation to his conviction may be reviewed by the insurance company prior to any payout, and may delay or, if misrepresentation or fraud is found, prevent a payout,” Romania said.

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This story was originally published in June 2025.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.