Buying Life Insurance if You’re Transgender

If your sex assigned at birth doesn’t align with your gender identity, it could feel upsetting, awkward or confusing to answer questions about gender on a life insurance application.

Your gender identity typically doesn’t affect your eligibility for life insurance or the amount and type of coverage you need, says Rikin Shah, CEO of GetSure, a life insurance brokerage based in Greenbrae, California.

Applying for most types of life insurance involves a process called underwriting, where the insurer reviews your health and other risk factors. Knowing what to expect and the details you’ll need to provide based on the policy you choose can help you feel comfortable when applying for coverage.

During the life insurance underwriting process, companies look at factors like gender, age and overall health to assess risk and set prices.

“The life insurance business operates based on actuarial science and uses mortality tables to develop rates and premiums,” said Wynne Nowland, CEO of Bradley & Parker, a Melville, New York-based insurance firm. Nowland’s quotes were relayed to NerdWallet by her public relations representative.

As a transgender woman, Nowland understands the challenges transgender and nonbinary applicants face when responding to gender-related questions. The life insurance industry’s gender-based model is generations in the making and hasn’t yet grown to include transgender and nonbinary people as a whole, she said.

The good news? Insurers legally can’t discriminate against or reject applicants because they’re transgender or nonbinary.

Some insurers allow you to select the gender you identify with when applying for coverage. Other companies base rates on sex assigned at birth or assess applications on a case-by-case basis, so be sure to read the language on the application carefully.

Because insurers look at overall health and longevity as part of underwriting, you’ll likely need to disclose the details of any gender-affirming care, like hormone therapy, medications and surgeries.

Dr. Carl Streed, research lead for the GenderCare Center at Boston Medical Center, believes exploring life insurance is a way for the transgender community to gain access to financial tools that promote long-term stability.

Before applying for life insurance, Streed suggests having key information handy. This may include how long you’ve been on hormone therapy, which regimens you’ve followed in the past and any medical conditions you’ve had treatment for.

Most insurers will postpone your life insurance application if you have any upcoming surgery — gender-affirming or otherwise. Since underwriters look to reduce risk, it’s a good idea to hold off on applying for coverage until after major medical procedures to avoid a denial.

Having had gender-affirming surgery in the past won’t necessarily affect your application or rates. However, your insurer will likely look at the details around your surgery and recovery to determine if there are any related risks or complications.

In most cases, hormone replacement therapy will trigger an additional review, Shah says. While you may end up paying a higher premium, you’re unlikely to be denied coverage because of hormone therapy alone.

Because of social stigma, discrimination and harassment, many transgender people are at risk of being diagnosed with a mental health condition, according to the 2018 Michigan Trans Health Survey. More than 72% of transgender and gender-diverse participants said they had been diagnosed with depression in their lifetime, while 73% had been diagnosed with anxiety.

While having a mental health condition won’t disqualify you from most types of life insurance, it may make the insurer’s underwriting process more thorough, Shah says.

If you have a mental health condition that isn’t well controlled, you could pay higher premiums or be denied coverage. Working with an agent or broker can help you navigate your options.

The level of detail you’ll need to reveal depends on the type of life insurance you choose. Term life insurance and whole life insurance are the main categories, and both types have different levels of underwriting available.

A “fully underwritten” policy involves filling out a questionnaire and taking a life insurance medical exam. This process can offer affordable coverage, but often means sharing sensitive personal information.

If you’d rather maintain privacy, there are less intrusive underwriting processes for these policies:

• Group life insurance. Some employers sponsor free or low-cost plans with no medical exam requirement. 

• Guaranteed issue. This whole life insurance policy skips the questionnaire and medical exam, though coverage is limited and expensive. 

As Nowland said, while the insurance underwriting process may feel awkward because of the historic gender binary, don’t be afraid of applying because of your gender identity.