Transgender life insurance
Searching for life insurance as a transgender individual is complicated, but the good news is more insurance companies are updating their coverage policies, and transgender life insurance is now a thing.
Can I get transgender life insurance?
Yes, but there are some things you need to be aware of when applying. For this article, we reached out to Jennifer Fitzgerald, CEO of Policygenius, to see if underwriting requirements were different for transgender applicants and here’s what she had to say:
“When it comes to applying for life insurance, there are no mandated different underwriting requirements for transgender applicants. Any applicant can expect the standard protocols of the carrier they choose to apply with, such as medical history, age, etc.
There are a few unique aspects of the application process that transgender people can be aware of. For example, while most carriers will underwrite an applicant based on present gender identity, a few carriers may stipulate underwriting according to sex assigned at birth. This decision-making varies by carrier, so it can be really helpful to shop around through an independent broker who can help you understand all your options.”
Things are getting better for all LGBTQ people. You can not only get transgender life insurance, but some carriers benefit you more as a transgender person depending on your goals for coverage.
Let’s look at which carriers are the most trans-friendly and give you an idea of how insurance carriers view and underwrite transgender life insurance coverage.
The challenges with getting life insurance as a transgender person
However, when you’re looking for life insurance as a transgender person, you may encounter some gender discrimination, especially if you live in a state that doesn’t prohibit discrimination for services against trans people.
For example, some states have laws that require you to go before a judge to change your gender identity. To get your sex changed legally, you may first have to undergo expensive gender reassignment surgery. One state that had such a law was Colorado. In 2019, Jared Polis, Colorado’s governor, created a Jude’s Law. This law made it easier for transgender people to change their gender identities on their birth certificates and driver’s licenses.
On top of that, some insurance companies won’t cover this surgery; therefore, you may have to travel to another state, which can be quite expensive.
According to HealthCare.gov, “Many health plans are still using exclusions such as “services related to sex change” or “sex reassignment surgery” to deny health insurance coverage to transgender people for certain health care services. Coverage varies by state.”
Traditional differences between men and women with life insurance
In the United States, life insurance rates are usually cheaper for women than men. That’s because insurance rates are influenced by life expectancy; on average, women are expected to live longer than men.
That said, you must decide what’s most important to you. Is getting the lowest insurance rate possible more important to you or is getting coverage based on your gender identity?
Best age to get life insurance
While the best age to get life insurance depends on your unique financial circumstances, it’s usually best to buy insurance as early as possible. Why? As you get older, purchasing life insurance becomes more expensive.
For example, according to a ValuePenguin article, the average cost of life insurance for a 25-year-old non-smoker in 2020 is $25.67 a month. For a 40-year-old non-smoker, the cost is $38.14 a month. That’s a difference of $149.28 per year.
The difference becomes even more pronounced once you hit 50 years old – the average monthly cost is a whopping $91.53 a month.
What type of life insurance is best for transgender folks?
There are two types of life insurance, term life and whole life. Term life insurance lasts for a specified length of time. Whole life will last your entire lifetime.
Which type of life insurance is best for you?
That depends on your unique circumstances. Most people recommend term life because it’s cheaper. With the money you save from purchasing term life insurance versus whole life insurance, you can invest the difference and build wealth faster.
But what happens if you purchase term life insurance and it expires right before something bad happens? Will you be disciplined enough to save and invest the right amount of money to help your loved ones live comfortably in the event of your demise?
If you’re not sure, then whole life insurance might be right for you. In addition to lasting your entire lifetime, there’s a cash value component to it – a portion of your premiums are set aside.
Do these benefits sound lovely to you? What’s the downside? The biggest con is that this permanent life insurance can cost you 15 times more than term life, according to Policygenius.
With that being said, term life insurance is best for 90% of those who want life insurance. That’s due to the amount of coverage you can purchase with small premiums. I recently asked over 40 experts about which coverage is best, term versus whole life insurance. An overwhelming majority of respondents chose term life insurance.
When you start searching for life insurance quotes, most rates you’ll see online are for term life insurance. For this article, my research and outreach focused on term life insurance.
Do insurance carriers recognize me as a transgender person?
There’s no single answer to how insurance carriers will underwrite you. Every insurance company will have different underwriting guidelines. Some are more conducive to the transgender community than others.
Some carriers follow state guidelines, specific to where you live. An insurance agent can get the specifics for you from each insurance carrier.
John Hancock underwriting guide for transgender folks
John Hancock underwrites life insurance policies based on gender at birth unless reassignment surgery has been completed.
Prudential Life Insurance underwriting guide for transgender folks
Prudential Life Insurance underwrites life insurance based on gender identity. However, if you’re a trans man with breast cancer, they’ll underwrite your policy based on your gender at birth.
We partnered with Prudential to spread the message of financial wellness in the queer community. Here are three tips for reaching financial wellness as an LGBTQ person.
Debt Free Guys & Prudential on Financial Wellness in the Queer Community:
MassMutual/Haven Life underwriting guide for transgender folks
MassMutual/Haven Life will underwrite your life insurance policy based on gender identity.
Principal Life underwriting guide for transgender folks
Like MassMutual/Haven Life, Principal Life will underwrite your life insurance policy based on gender identity
TransAmerica underwriting guide for transgender folks
TransAmerica is similar to John Hancock in that they underwrite your policy based on gender at birth unless you’ve completed gender reassignment surgery.
Standard Life underwriting guide for transgender folks
Standard Life will underwrite your life insurance policy based on gender identity if you’ve gotten medical treatment to help with your gender transition
Can I get life insurance if I’ve had gender reassignment surgery?
Yes, two of the life insurance companies we reached out to, John Hancock and TransAmerica, actually require gender reassignment surgery to be completed, otherwise, your policy will be underwritten based on your gender at birth.
Also, as long as you don’t have breast cancer, Prudential will allow you to get life insurance if you’ve had gender reassignment surgery.
If you’re thinking about having reassignment surgery, you’re least likely to encounter challenges in states prohibiting discrimination against transgender people.
According to Human Right Campaign’s (HRC) 2019 State Equality Index report, here are the states that ban insurance exclusions for transgender health care and/or “provide inclusive health benefits for state employees”:
- New Mexico
- New York
- New Jersey
- New Hampshire
When applying for life insurance after you’ve had reassignment surgery, here are some other factors you should consider:
- How far along are you in the transition phase?
- Are you taking any drug therapies to help with your transition? Do these drugs have side effects?
- Has your surgery and/or drug therapies resulted in health issues that are likely to continue?
Insurance companies that cover gender reassignment surgery
Here are some insurance companies that cover gender reassignment surgery:
- United Health Care
- BlueCross BlueShield
In addition, according to HRC, “many large private-sector employers have taken steps to actively remove exclusions on transgender healthcare from their employer-provided plans.” They also recommend you look into medicare/Medicaid programs if you’re enrolled in those.
What name should transgender folks use when applying for life insurance?
You definitely want to check with each individual carrier that you are thinking about applying for, but there are two things to consider:
- Have you legally changed your name in your state?
- Do you have documentation showing your name has changed?
As many traditional insurance carriers require answering questions to an agent in person, filling out paperwork, getting a medical exam and waiting on results, it’s likely that you’ll be asked to provide documentation showing your legal name.
What if you haven’t changed your legal name yet? How much will it cost?
The cost to legally change your name varies depending on where you live, so you’ll have to reach out to your local Clerk of Court to find out how much it costs.
According to Total Legal, the fee to change your name can be as low as $10 in some Alabama counties and as high as $500 in some parishes in Louisiana.
Are there more friendly carriers than others for transgender life insurance?
Yes, some carriers are definitely more friendly than others when it comes to transgender life insurance. Haven Life, Principal and Prudential are the more trans-friendly insurance carriers and will acknowledge your gender identity. To be clear, all the carriers on this list are trans-friendly. It’s just that these three have better transgender life insurance policies.
While those three carriers will underwrite your life insurance policy based on your gender identity, some only underwrite your policy based on gender at birth.
In addition, some insurance companies such as John Hancock require you to undergo gender reassignment surgery, which can be quite expensive. For example, when we interviewed Andi Tremonte about the high cost of being transgender, we learned that it can cost around $30,000 for female-to-male reassignment surgery.
Whether you choose to have surgery is a personal decision, but as Andi stated in our interview, don’t feel any pressure to have the surgery just because you identify as trans. It’s not a requirement.
The high cost of being transgender
In this episode of Queer Money®, we talk to Andi Tremonte about being transgender and the high cost of female to male reassignment surgery.
Trans activist Andi Tremonte on Queer Money®:
Mistakes to avoid when buying life insurance?
When purchasing life insurance, you should try to avoid the following mistakes:
- Not purchasing the right amount of coverage for your needs
- Purchasing the wrong type of policy
- Not researching all of your life insurance policy options
- Choosing the wrong beneficiary
Do I need a health exam to get life insurance?
Unfortunately, many life insurance carriers require a medical exam of some sort before completing the underwriting process. This can be as invasive as having to go to your doctor’s office for a complete exam and blood work up to having an affiliated health care professional representing the insurance underwriter meeting you at your home or place of work for a basic exam and blood work. There isn’t a charge to you for this service.
John did this when he applied for insurance through Haven Life, which, as stated above, is one of the more progressive insurance carriers for transgender folks.
There are a few carriers that don’t require a medical exam when applying. Typically you’ll find that the coverage for these carriers have shorter terms than most carriers, many in the 2-10 year range. In addition, insurance is typically term life insurance, which may be a good fit for you and your loved ones because it usually costs less.
How to prepare for a life insurance medical exam?
If you elect to get life insurance with a medical exam, here are some tips to prepare for it:
- Get a good night’s sleep the day before
- Drink a lot of water
- Do not drink alcohol
- Do not smoke
- Eat healthy food (Most research says avoid salty foods)
Do I need to work with an insurance agent to get insurance coverage?
No, but you probably should.
There are newer carriers, such as Ladder Life and Haven Life, that offer life insurance without needing an agent. However, depending on your situation, it might be best to go through an insurance agent.
Trust me, I understand. Talking about your situation isn’t always easy.
If you’re a part of the LGBTQ community like me, you likely deal with the assumption that if you’re male, your spouse is female and vice versa. I’m always in correction mode. The difference with purchasing transgender life insurance is that licensed agents, such as me, are bound by the Health Insurance Portability and Accountability Act (HIPAA) guidelines and privacy laws. Insurance carriers also hold us accountable for doing our best with each client.
The best way to talk to an insurance agent is to be honest, upfront and hold nothing back. The agent is like your doctor or lawyer; they won’t judge you or make you uncomfortable.
They only want to get you the best insurance coverage for you and your family. GLADD has an excellent resource for teaching people about the transgender community. Email this guide to your agent if you think it’ll help them better understand you.
If you’re upfront with your insurance agent, they can place you with the carrier that best fits yours and your family’s needs.
Furthermore, An agent can help you determine how much coverage you need and answer any questions you may have regarding the different types of life insurance out there.
How can I get transgender life insurance?
If you’d like to get transgender life insurance today, here are the steps you should take:
- Determine the amount of coverage you need
- Research carriers
- Consult a professional
1. Determine the amount of coverage needed
According to Investopedia, most insurance companies recommend that you carry six to ten times your annual salary in life insurance. So, if your annual salary is $40,000, you want to purchase a policy that’s between $240,000-$400,000.
2. Research carriers
After you’ve read this article, I encourage you to do your due diligence. If you don’t see an insurance carrier you like, follow Jennifer Fitzgerald’s advice and shop around.
3. Consult a professional
John used Haven Life for his life insurance because it gave him coverage immediately. Plus, Haven Life’s backed and wholly owned by MassMutual. MassMutual has been a frequent sponsor of the Queer Money® podcast.
To learn more about how Haven Life can help you, click this link here.
We talked with Mark Sayre, Underwriting Product Manager for Haven Life and a member of the queer community about why all queer people need life insurance.
Here’s why all queer people need life insurance:
Policygenius has no hidden fees, you’ll only complete one application and, best of all, their advice is unbiased.
To learn more about how Policygenius can help you, click this link here.
How being nonbinary effects getting life insurance?
Being nonbinary doesn’t stop you from getting life insurance, but for now, you’ll have to apply as either a male or female. According to Investopedia, “The underwriting process has not changed despite broader awareness that many people do not see themselves in binary definitions of gender.”
How transgender people can overcome systemic money challenges
In this episode of the Queer Money® podcast, we talk to Brynne Conroy about her book, The Feminist Woman’s Handbook: A Modern Woman’s Guide to a Wealthy Life. Nicole, a transgender veteran, shares her story of what life is like for a transgender person.
Hear trans activist Nicole Lynn Perry on Queer Money®:
More tools to help transgender folks with their life, health, and wealth:
- Dominique Jackson on Love, Life, & Abundance
- How to Find LGBT Assisted Living Facilities
- How to Retire? 21 Tips for Financial Planning for Retirement
This was originally a guest post written by Sa El, co-founder & CEO of Simply Insurance. Sa is a licensed life and health insurance agent with over nine years of experience in the industry.
This has since been edited and updated by Jerry Brown, the mastermind behind the blog Peerless Money Mentor. When he is not reading thought-provoking books or studying finance, he is spending time with family, biking or taking a random adventure somewhere.