Guide to Life Insurance for Transgender People

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Life insurance provides financial protection for your loved ones after your death. Policy payouts are used to cover not only burial and funeral costs, but also income loss, inherited debts, college tuition and other expenses. For many, it’s an essential part of financial planning.

However, if you’re a transgender, nonbinary, or gender non-conforming person, applying for life insurance may not be as streamlined as applying as a cisgender person (meaning someone whose gender identity is the same as their sex assigned at birth). Still, it’s important to know: People of all genders can get life insurance. Nobody can be denied life insurance based on their identity alone.

We consulted a life insurance industry expert and a senior policy counsel at the National Center for Transgender Equality to create this guide. Read on for help in preparing yourself for getting life insurance.

Table of Contents

• Life Insurance Coverage for Trans People
• Life Insurance Claims and Payouts for Transgender Policyholders
• How to Avoid Getting Turned Down for a Life Insurance Policy
• Life Insurance for Transgender People FAQ
• Summary of Our Guide to Life Insurance for Transgender People

Life insurance coverage for trans people

Every person is eligible to apply for life insurance, regardless of gender. As a trans, nonbinary or gender non-conforming person, though, you may have questions as you move through the application process. Read on for answers.

How to indicate your gender on an application

Life insurance companies ask applicants to provide their sex because premiums are largely based on life expectancy. In the U.S., people assigned female at birth (AFAB) currently outpace people assigned male at birth (AMAB) in this category, so the latter are typically required to pay slightly higher rates.

Herein lies a problem: What does the company mean by sex? Should you indicate your sex assigned at birth? Or should you provide the sex on your updated identity documents? What if you’re nonbinary?

Adding to the confusion, some companies ask for “gender” instead of “sex,” as if these terms are interchangeable. This is a question you’ll have to answer — even if you’re just looking for a life insurance quote and aren’t yet ready to apply.

According to Chris Rzany, assistant vice president of strategy at Fidelity Life, applicants should always respond to this question with their sex assigned at birth.

Additionally, life insurance companies often check medical records, and you may have medical records that list your sex assigned at birth, as opposed to your lived gender. You don’t want any technical discrepancies, as they could lead to delays in getting coverage, he says.

Life insurance companies rely on mortality data that does not include information on the life expectancies of transgender or nonbinary people. However, Rzany says, “There’s every reason to expect that will evolve in the future, just as mortality tables have continually evolved in the past. As more data becomes available, we should expect those mortality tables to change.”

In short: Until the life insurance industry changes its protocols, you’ll need to indicate your sex assigned at birth — regardless of your lived gender or gender expression.

You will have the opportunity later, though, to discuss your identity with an agent, if you so choose.

Preparing to work with a life insurance agent

While many life insurance companies provide LGBTQ+ issues training to employees, there’s no guarantee the agent you work with will be entirely knowledgeable about trans and nonbinary identities.

For that reason, C.P. Hoffman, senior policy counsel at the National Center for Trans Equality, says this aspect of applying for life insurance can be “really terrifying.”

“Be prepared to explain transness to someone who probably doesn't understand it. Be prepared to tell them the issues that are likely to exist that they need to sort out in order to help you get life insurance,” Hoffman tells Money.

Still, working with a life insurance broker or agent — by online chat, phone or in person — is the best path for avoiding any problems resulting from questions you’re not sure how to answer. It’s also the best way to bring up subjects that life insurance companies haven’t thought to ask, too — something Hoffman says you’ll likely have to do.

Depending on your situation, you might want to discuss:

• Sex assigned at birth versus your gender identity
• Status of your identity documents
• Hormone therapy medicines
• Gender-confirmation surgery plans (if applicable)

Remember that there are no-exam life insurance policies available. Coverage is sometimes capped at lower amounts with this kind of life insurance, but it may be the right option for you. A life insurance broker or agent can help you decide.

If you’re concerned about talking about personal details with a life insurance company representative, consider seeking a life insurance policy through the help of an LGBTQ+ financial advisor like those listed below.

• Center for LGBTQ Economic Advancement and Research
• Be Intentional Financial
• Young and Scrappy
• LGBT Financial

How being trans can affect life insurance premiums

Your identity as a trans or nonbinary person on its own will not affect your premium cost. Life insurance companies aim to price policies as accurately as possible. Agents will try to get the most comprehensive understanding of your likely life expectancy.

Below you’ll find factors that can — and cannot — affect your life insurance rates.

Factors that may affect premium costs:

• Sex assigned at birth
• Age
• Current health (physical and mental)
• Medical history (physical and mental)
• Surgeries
• Tobacco or nicotine use
• Prescription use
• Family medical history
• Driving record
• Hobbies (high risk, e.g., skydiving, means higher premiums)
• Occupation (high risk, e.g., aircraft pilot, means higher premiums)
• Income
• Type of life insurance policy (term life insurance, whole life insurance)
• Coverage amount

Factors that cannot affect premium costs:

• Trans identity
• Nonbinary identity
• Gender non-conforming identity
• Gender dysphoria diagnosis (it is not a mental health disorder)

What to expect during a medical exam

Underwriting is the process by which the life insurance company evaluates your risk profile by considering your health history, age and lifestyle. Whether you apply for a term or permanent life insurance, you will have to provide details about your identity and health. How comprehensive these questions are, however, will vary by policy and company.

Sometimes a medical exam isn’t required. If a medical exam is required, though, here’s what you can expect as standard procedure:

• The medical exam may be in your home, workplace, or the office of an exam company
• You’ll respond to a medical questionnaire
• Height, weight, pulse, blood pressure check
• Blood testing and urinalysis collection

Additional testing that may be required:

• X-rays
• Treadmill stress test
• Cognitive ability test (applicants aged 70 and older)
• Electrocardiogram ( applicants aged 50 and older)

How gender confirmation surgery affects coverage

Many life insurance companies ask applicants if they have surgery planned in the next 12 months. If you have any kind of surgery planned — gender affirmation related or not — agents will ask follow-up questions. Specifically, they’ll want to know whether or not the surgery requires general anesthesia because of its association with serious complications.

Depending on the risk involved, if you have a surgery requiring general anesthesia planned, you’ll likely be asked to postpone your application until after it’s complete and you’re physically recovered.

“It’s not about the nature of the surgery,” Rzany says. “It’s the fact that it’s surgery under general anesthesia.”

You may also be asked if you’ve undergone any recent surgeries. A company may recommend a waiting period of up to one year post-surgery before applying.

Insurance coverage alternatives for trans and nonbinary people

Life insurance is a unique financial protection for your loved ones in the event of your death. There isn’t one single alternative that fully replaces the death benefit, or the payout to beneficiaries, that life insurance offers. That said, there are some options that may fulfill some of the needs a life insurance policy meets.

Alternatives for individuals

• Funeral and burial prepayment - This service is provided by many funeral homes and cemeteries.

• Payable-on-Death account (POD)- Many banks allow you to designate a beneficiary to your account funds. State restrictions apply to POD accounts, so be sure to check with a financial advisor or an estate planning professional.

• Personal loan - Save funds received from a personal loan specifically for final expenses while you repay the loan monthly as if it were a life insurance premium. Note that any remaining debt on the loan could be deducted from any funds in your estate. Depending on state law and the kind of debt, it could be passed onto a spouse. Read about what happens to debt after you die or seek the guidance of a financial advisor if considering this option.

Alternatives for loved ones of a deceased person

• Government assistance - Some states offer burial assistance programs for low-income or vulnerable populations. Every state has a crime victim compensation program, though benefits vary. Federal programs (Social Security Administration, Veterans Affairs, FEMA) offer help for specific situations.

• Trade or labor union benefits - Depending on the organization, help may be available to members.

• Nonprofit funding - This option is intended for your loved ones in the event of your death. Help with burial and funeral costs may be available through nonprofit organizations, charities and community organizations.

• Fundraising - A campaign for your loved one’s final expenses could offset or entirely cover costs.

Life insurance claims and payouts for transgender policyholders

Life insurance companies are legally obligated to pay out death benefits per your policy agreement. However, there are some situations, which apply to all policyholders, that could delay payout or prevent it altogether.

• Lapsed policy - If payments aren’t up to date, coverage is no longer valid.

• Material misrepresentation - Any material fact that, had the insurance company known about it, it would not have issued the coverage.

Another area where discrepancies could delay payout: Name changes to identity documents. If you update your birth certificate and other identity documents, be sure to update your records with your life insurance agent.

Names of dependents, friends or anyone listed as a policy beneficiary should be up-to-date, too. In the instance that a beneficiary’s listed name does not correspond with their current legal name, the insurance company will likely ask that beneficiary to provide documentation of the change.

If you’re a beneficiary and feel you’ve been wrongfully denied a claim, you may seek a life insurance lawyer.

How to avoid getting turned down for a life insurance policy

As Chris Rzany of Fidelity Life reminds us, every consumer situation — such as their medical conditions, medical treatments and history of physical and mental health — is unique. But keep this in mind: You cannot be denied a life insurance policy solely based on your gender identity.

Talk to an insurance agent

Some life insurance policies require little to no interaction with an agent. However, for transgender and nonbinary applicants, it’s best to go through the life insurance underwriting process with guidance. Working with an insurance agent allows for specificity; you can ask questions about policy options and provide the most accurate information about yourself.

Talking to an agent can also help you determine what kind of policy is ideal for your situation. There are several life insurance products to compare, such as term versus whole life insurance policies.

Additionally, not all companies offer every kind of life insurance, and the specifics will vary by company. For example, Ladder provides more flexibility in its term life policies than most, allowing policyholders to adjust coverage as needed. In whole life insurance, Nationwide offers excellent bundling options for those also looking for homeowners or auto insurance.

Anticipate the documents you’ll need

Below is a list of documents you may be asked to provide to a life insurance agent.

• Original birth certificate
• Updated birth certificate
• Current license or state-issued identification
• Contact information for various medical providers

Consider LGBTQ-friendly insurers first

The Human Rights Campaign (HRC) Corporate Equality Index ranks companies based on inclusive policies, practices and benefits for LGBTQ+ employees on a zero to 100 scale. All of the companies below ranked 90 or higher in the nonprofit organization’s 2022 report.

• MassMutual
• Mutual of Omaha
• Nationwide
• New York Life Insurance Company
• Northwestern Mutual Life Insurance
• State Farm
• Guardian Life
• Liberty Mutual Group

Ask for recommendations from friends or family

Do you know anyone who has a life insurance policy? Ask friends or family, especially if they are also trans, nonbinary or gender non-conforming, if they have any recommendations. It could be possible that someone in your network has already found a great life insurance agent who is LGBTQ+ informed and friendly.

Know your rights

The laws that protect LGBTQ+ people against discrimination based on gender or sexual orientation vary by state. If you feel you’ve been unfairly turned down a policy or encountered any kind of discrimination in the application process, you have options.

Ask the company for a new agent

As C.P. Hoffman of the National Center for Transgender Equality puts it: “Don’t hesitate to escalate.” Reach out through the company’s customer service channels and explain what happened. Ask specifically for a new agent educated on trans, nonbinary and gender non-conforming identities.

Seek out legal help from LGBTQ+ organizations

Talking to the company about your experience can feel like “a second injury,” Hoffman says. If you aren’t comfortable talking with the company — or if the company doesn’t acknowledge any wrongs — you might want to consider legal action.

Consider the Transgender Law Center or another organization listed in the National Center for Transgender Equality’s legal services directory.

Summary of Our Guide to Life Insurance for Transgender People

The life insurance industry is structured primarily for cisgender people, meaning people whose gender corresponds with their sex assigned at birth. However, people of all genders can apply for and successfully buy coverage. That said, for trans, nonbinary, and gender non-conforming people, it’s best to work with a life insurance agent or broker to ensure the company gets a clear understanding of your profile.

Preparing yourself for the life insurance application process will help things go more smoothly. However, if you’re not treated with respect or are denied a policy based on your gender, know that you have options. Depending on the situation, you can ask for a new agent or seek legal counsel.