In North Carolina, HB2 has been a nasty thorn in the side in the news, bringing attention to some of the societal struggles with being transgender.

It brought up some important discussions about sex and gender identity, which is the first question that is usually asked when looking for life insurance.

When a transgender person wants to buy life insurance to protect his or her partner or family, it can be a bit more confusing and frustrating to find good coverage.

For people who are transgender, they may not be sure whether to apply under their identified gender or their biological sex. Let’s sort that out.



Underwriting for Transgender clients

Life insurance companies all have different methods for determining eligibility and rates. Some insurance companies are pickier than others about which risks they’ll take in insuring people.

You may know someone who’s had a lot of health issues and had a hard time finding quality coverage.

On the other hand, you may also know someone who’s super healthy and gets $500,000 in term life for $30 a month.

There is no one right answer as to whether to apply as biological sex or identified gender because each insurance company does their underwriting differently.

Life insurers have a department called Underwriting (and the people who work in them are underwriters), whose sole job is to review at the applicant’s answers to health questions, look at their medical history and prescriptions, match that against an actuary’s mortality risk table and consider that against the individual’s biological and lifestyle risks to determine if coverage can be offered, and if so, at what rate (how much it will cost).

In my experience, there are some insurers who won’t even consider an application from a transgender person, they’ll just decline it.

Others are more than happy to work through the underwriting for a transgender person.

They may even consider a transgender person to get a preferred rating if they’re healthy. On average, though, most transgender applicants are standard rating because of mental health, medication usage, or other risks.



Biology and insurance premiums

In the insurance industry, women typically pay less in premiums, except before Obamacare, when females had to pay 2-3x the premiums if they wanted any sort of health care during pregnancy.

Since the Affordable Care Act (aka Obamacare) became law, females are no longer discriminated against, and their premiums are lower.

Generally, females live longer than males and pay lower life insurance rates. But what happens when a transgender man or woman applies for life insurance?



Apply as biological sex or identified gender?

Some insurers may just want a person to apply based on their birth sex and don’t pay any attention to their gender identity. Others may offer a rate change after reassignment surgeries or hormone therapies.

Others may just go with gender identity and call it a day.

As you can see it can get complicated, but what it comes down to is the carrier’s underwriting qualifications.

Underwriting standards are how insurance companies assess risks (like high blood pressure) with your overall health snapshot and determine how to rate an applicant or whether to even make an offer.


What if I’ve had top or bottom surgery?

Because only males can get testicular or prostate cancer, and likewise only females can get uterine cancer, the risks are considered against whether the organs are still part of the body.

For a woman who’s had bottom surgery, she would be considered differently than a woman who has not yet had bottom surgery done. When biological risks change, the underwriters take that into consideration when evaluating the application.

For a man who’s had top (and maybe even bottom) surgery, it’s the same type of situation. While both males and females can get breast cancer, it’s much higher for females, and when top surgery is completed that risk is reduced.

Do not take this information to mean you should have surgery so you can apply for life insurance! I’m sharing this so you can understand how your body’s changes can shift the biological risks males and females have.



What are the biggest underwriting risks to transgender people applying for life insurance?

Unfortunately, many transgender people suffer from brutal bullying and social shaming which translates to mental illness.

Depression and suicidal thoughts are not uncommon for any LGBTQ person to have, but when non-transgender LGBTQ people apply for life insurance, sexual preference is never asked or considered.

Mental health comes upon a transgender application because of the health and medication questions on the application. If you have been treated for mental illness or hospitalized for suicidal thoughts, you should discuss that with your agent, because if you don’t, the insurance company will find it on your medical history.

When an applicant does not disclose pertinent information and it’s later found on medical reports, it’s more likely your application will be declined. When an application is declined, it’s sort of like a credit hit. There’s a file called MIB, and your declined application (with reason) will show up on that. When you apply for another life insurance policy, the next insurer will see all of that and it sort of snowballs into more problems for you.

Another common underwriting concern is how hormones may affect the body’s organs. There is not normally an issue with taking hormones, but sometimes they can trigger other complications.

If taking hormones, it might be a good idea to apply for life insurance where an exam is required.

When people apply for non-medical life insurance (you’re only asked health questions, no blood/urine/etc is taken for labs), the insurance company pulls your medical history but cannot necessarily put it into a context. The more information you can offer on your application, the better the underwriter can to understand your unique situation.



What happens if I apply for life insurance and don’t apply as my biological sex?

Unless the insurer specifically states a non-discrimination policy about transgender applicants (meaning: if you identify as a woman, and apply as female, and they know you are transgender), the insurer is well within their right to deny claims.

Let’s look at the non-transgender application for a moment to get a context.

Suppose a male with an androgynous name (Chris, Alex, Morgan, etc) applies for life insurance as a female (to get lower rates), and the application is approved. He might think he outsmarted the underwriter and got life insurance for cheap!

But then 5 years later he dies in a sharknado, and his birth and death certificates both identify him as male. His family submits a death certificate with a claim to the insurer for $500,000. Even though it’s past the 2-year contestability period, lying about important things like age or gender is considered material misrepresentation, and the insurer might completely deny the claim no matter how old the policy was and instead send the premiums paid back to the family — and that’s it.

This could potentially happen to a transgender person, which is why I recommend identifying yourself accurately. If a claim does come in, it’s already on paper and on file that you are transgender to avoid any disputes over the validity of the claim.



How to find the best carrier and rate for transgender people

If you are a transgender person or want to get life insurance for a loved one who is transgender, this is when it’s very important to work closely with an independent life insurance expert who has access to a variety of carriers, and can do all the legwork to find out for you what you need to do to apply.

Having an independent agent is the key to getting the appropriate coverage, and finding the best rates possible, because when you go down the street to your local TV-advertised big-budget carrier who also sells car and homeowners insurance, you will find yourself paying more to work with someone who is not a life insurance expert.

When you look for an independent agent, interview them to find out how willing they are to work with LGBTQ clients. A good agent will ask you lots of questions to understand your individual needs and situation.

The insurance industry as a whole is a slow-moving dinosaur, and always way behind the curve of changes in technology and social norms.

Many agents have a socially conservative view, but that does not necessarily mean they won’t help you.

Just be sure to check first, because if the agent you work with does not understand or agree with your gender/orientation/etc you may find the experience of getting life insurance to be frustrating, painful and hurtful, and give up before you can get covered.


Broad Creek Financial Services recognizes and celebrates the important difference between sex and gender, and encourages any LGBTQ person to apply for coverage through us.