A life insurance policy protects your loved ones after you’re gone. Your beneficiary (or multiple beneficiaries) can use the death benefit to cover anything from funeral costs to daily living expenses. For many, this coverage is a key part of a comprehensive financial plan, but for the 1.6 million transgender individuals in the United States, obtaining life insurance can be a complex process.
You cannot be denied life insurance coverage based solely on your gender identity. However, the application process for transgender, nonbinary, or non-gender-conforming people may not be as streamlined as it is for a cisgender individual (someone who identifies as the gender assigned to them at birth). Learn more about what you can expect when shopping for life insurance.
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How Being Transgender Can Impact Life Insurance
Life insurance carriers consider many factors when determining eligibility for life insurance coverage and premium rates. Gender typically plays an important role, as it influences life expectancy and impacts whether an applicant falls within the insurer’s set range for cholesterol, blood pressure, and build.
All of these things can make assessment for transgender people more complex. For example, insurers also consider an applicant’s medical history, including prescription medications, mental health conditions, and planned surgeries during the underwriting process.
Health History
A survey found that transgender people tend to describe their health as poor to fair and are prone to certain health conditions, including ulcers and emphysema. Transgender women are also more likely to be diagnosed with HIV than the general population.
A below-average health history or diagnosis of a serious condition can result in higher life insurance premiums. In some cases, an insurer may determine an individual is uninsurable and refuse to issue a life insurance policy.
Hormone Therapy Side Effects
Transgender people who use hormone therapy may experience side effects that can impact the life insurance underwriting process. For example, masculinizing hormones can cause changes in cholesterol levels and may worsen heart problems. Feminizing hormones have been shown to increase body fat, cause anemia or clotting, impact heart function, and increase cholesterol.
Mental Health Considerations
Some research suggests that transgender individuals are more likely to commit suicide and may be at higher risk for depression and anxiety disorders. If you have suffered from mental health issues in the past, the insurer may factor this in when determining premium pricing. However, mild cases of anxiety or depression are generally not an issue.
It’s also important to note that a diagnosis of gender dysmorphia is not considered a mental illness and should not impact premium rates in the absence of other issues.
Gender-Specific Risks
While some insurers may accept an application based on an individual’s current gender identity, others consider their gender assigned at birth when assessing risk. For example, a transgender individual who was assigned male at birth may still have a risk of developing prostate cancer, and someone assigned female at birth may have an increased risk of osteoporosis.
Gender Confirmation Surgery
Individuals who are planning a gender confirmation surgery may have a more difficult time securing life insurance. When completing the application process, insurers typically require you to disclose whether you are planning surgery in the next 12 months.
Due to the inherent risks associated with undergoing surgery, many insurers only write a life insurance policy on individuals planning a surgery once both the procedure and recovery are complete. This is true regardless of whether the surgery is associated with gender confirmation.
An Option to Consider: Avoid Medical Underwriting
Not all life insurance policies require detailed medical underwriting. For example, simplified issue life insurance offers a more general health survey instead of a comprehensive medical examination. Another type, guaranteed issue life insurance, skips the medical assessment altogether. These may be good options if you are concerned that health issues may impact your insurability.
However, these policy types also tend to have higher premiums and lower coverage limits. They may also feature waiting periods of two to three years. If you die during the waiting period, your beneficiaries do not receive the policy’s death benefit.
Choosing Your Gender on a Life Insurance Application
Completing a life insurance application requires you to indicate your gender. Some insurers may require you to specify your gender as assigned at birth, while others ask for your current gender identity. The insurer may also require you to provide documentation that shows your gender, such as a driver’s license or birth certificate.
It may be helpful to research the insurer’s procedures and choose a carrier with inclusive policies toward transgender applicants. If you’re not sure where to start, consider working with an insurance agent or broker experienced in serving the LGBTQ+ community.
Managing an Existing Policy After Transition
If you already have an active life insurance policy under your dead name/gender, you need to update your policy to reflect your identity. Here’s how you can approach the process:
- Contact your agent or insurer. Reach out to your life insurance agent or the insurance company to ask how to update your name and gender.
- Provide documentation. You may be required to provide legal documentation of your name and/or gender change, such as a court order, new birth certificate, or current driver’s license.
- Review your policy. Consider reviewing your policy and taking this opportunity to make additional changes that may make the coverage a better fit for your current needs or circumstances.
- Consider the impact. Understand that changing your gender on the policy may impact your premiums, depending on the insurer’s policies. Clarify with your insurer whether changes will affect your rates.
- Confirm changes. Once your insurer has processed the changes, ensure you receive written confirmation showing that your policy has been updated. This helps avoid any confusion or issues in the future.
- Seek assistance if needed. If you encounter any difficulties or discrimination while updating your policy, consider contacting LGBTQ+ advocacy groups or legal assistance for support. They can offer guidance or intervene on your behalf.
Putting It All Together
For transgender individuals, the process of applying for a life insurance policy may involve additional considerations, such as deciding how to report your gender and understanding the impact of your medical history. However, insurers cannot deny coverage based on your gender identity alone.
Working with an agent or broker well-versed in LGBTQ+ issues and choosing an insurer with an inclusive policy can make the process smoother, as well as ensure you have a policy that understands your needs. If you encounter discrimination along the way, know that you deserve coverage just like anyone else. Reach out to advocacy groups, who can help you navigate the process.