Shopping for life insurance requires time and research to ensure you’re getting the best policy to fit your needs. But as a transgender individual, the process can be a bit more complex.
Do transgender people have to get special life insurance? And what is the best life insurance for transgender people? Below, we examine these questions and everything else you need to know about transgender life insurance.
Does Being Transgender Affect Your Ability to Get Life Insurance?
Being transgender in and of itself has no impact on life insurance underwriting, according to Ryan Pinney, president of Pinney Insurance Cente. You shouldn’t be denied a policy or charged a different rate simply because you are transgender. However, some insurance companies still use sex assigned at birth to determine the policy’s rate rather than the person’s gender.
The reason is that they base their risk assessment or underwriting on mortality, Pinney says, which is strongly tied to sex.
“For example, an individual assigned male at birth transitioning to female still has a prostate, which poses an increased risk for prostate cancer later in life, and individuals assigned females at birth still have an increased risk for osteoporosis,” he explains. Further, men generally have a lower life expectancy than women and usually pay higher life insurance rates.
Today, however, many life insurance companies will accept the gender the applicant identifies with, according to Jeremy Hallett, founder and CEO of Quotacy. The exact underwriting requirements vary by insurer. For instance, a few life insurance companies surveyed by Quotacy will use birth gender unless it’s been a minimum of three years since completing gender reassignment surgery, in which case it will consider the applicant’s current gender. Other companies surveyed said they would simply recognize the gender the applicant identifies with.
Life Insurance for Transgender People Who Have Already Transitioned
Pinney says that being transgender generally has no additional risk from a life insurance perspective, “but insurance companies will use your personal medical history to make any additional decisions.”
Hallet adds that care is taken when evaluating mental health and the effects of hormone therapies, which can affect insurance pricing. For example, transgender individuals are at a higher risk for depression, anxiety disorders and suicide than cisgender people. So insurance companies will want to review your medical history in detail to determine how any diagnoses and treatment history could impact your life insurance cost.
It’s important to note that a gender dysmorphia diagnosis is not considered a mental illness and shouldn’t impact life insurance rates. That said, each insurance company will evaluate this information on a case-by-case basis and may request a more thorough assessment by medical professionals.
Life Insurance for Transgender People Who Are Transitioning
Acquiring life insurance can be a bit more complicated if you’re in the process of transitioning.
“Most, if not all, insurance companies will postpone offering coverage if any gender-affirming surgeries are pending until after the completion of the surgery and recovery,” Hallet says.
That’s because there’s an inherent risk associated with surgery of any kind. Since life insurance companies are tasked with evaluating mortality risk, they will want to wait until after you’ve recovered from surgery before issuing a policy to ensure there aren’t any complications. So if you have a gender-affirming surgery scheduled for the future, you probably won’t be approved for a policy until surgery is completed.
In some cases, you may be required to provide an attending physician’s statement (APS). This is a letter from a doctor that provides a professional assessment of your health and additional context or details about a medical condition. It’s often needed for life insurance applicants undergoing specialized medical treatments.
If you’re worried about a delay in getting covered, the good news is that you may be able to get temporary life insurance to fill the gap. This covers you during the period between applying for a policy and getting approved. In other cases, the insurance company may backdate your policy.
Dealing With Discrimination When Applying for Life Insurance
Though life insurance companies are supposed to evaluate all applicants equally, discrimination can happen.
There are federal laws that specifically protect transgender individuals from discrimination relative to health insurance, Hallet says. Life insurance, on the other hand, is less clear. And the protections in place vary by state. Some have clear anti-discrimination laws in place, while others institute protections that may or may not include life insurance. Fortunately, more laws are being introduced to ensure transgender life insurance applicants are treated fairly.
For example, Hallet says the state of Delaware has current penalties to protect against unfair discrimination in the value of insurance policies and premiums based on race, color, religion, sexual orientation, gender identity or national origin. “Gender identity” is defined as “a gender-related identity, appearance, expression or behavior of a person, regardless of the person’s assigned sex at birth.”
New Jersey has a bill prepared for the 2022 session to prohibit unfair discrimination in issuing or rating life insurance policies based on transgender status or certain gender identity information.
That means choosing the right insurance company is key.
In a 2022 survey of more than 500 members of the LGBTQ+ community conducted by Bestow, it is clear that the LGBTQ+ community prioritizes end-of-life planning, with 63% of respondents having life insurance, a will or long-term care insurance.
“If you’re transgender, it’s important to work with an agent or broker who has access to many companies and can help transgender individuals navigate the underwriting process most effectively and efficiently,” Pinney says. “The best advisors and brokers will understand the transgender community, be able to provide rates from multiple companies, and advise which companies and products individuals should select.”
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