Gender's Role In Life Insurance: A Complex Dynamic

Gender plays a significant role in determining life insurance rates. Men generally pay more for life insurance due to a shorter average life expectancy and a higher risk of early heart attacks. Women, on average, live about five years longer than men, which is a crucial factor for insurers when setting rates, especially for policies stretching into senior years. Additionally, gender-specific conditions, such as prostate or testicular cancer for men, and ovarian or breast cancer for women, can impact insurance risk and premiums. While gender is a factor, health and lifestyle choices often have a more significant influence on insurance rates.

Life insurance rates for men and women

Men and women have different life insurance rates due to factors such as life expectancy and health risks. Men generally pay more for life insurance because they have a shorter average life expectancy and are at a higher risk of an early heart attack, among other risks. Women, on the other hand, tend to live longer than men and thus pay less for life insurance. This difference in life expectancy plays a significant role in the rates offered by insurers, especially for policies that stretch into senior years.

The average lifespan of a man is 74 years, while that of a woman is 79 years. This five-year difference increases the likelihood of a life insurer having to pay a death benefit, which is reflected in the rates offered to men. The average age for a first heart attack in men is 65, while it's 72 for women. This also contributes to the higher rates for men, as the likelihood of a claim being made within the policy term is higher.

However, it's important to note that shopping around and managing health risks can help mitigate some of the gender differences in life insurance rates. Additionally, other factors such as medical history, lifestyle choices, and family medical history also play a significant role in determining life insurance rates and can often have a bigger impact on the overall cost.

When it comes to transgender individuals, the process of obtaining life insurance can be more complex. While being transgender does not automatically disqualify someone from getting life insurance or result in higher rates, the application process may vary depending on the individual's gender identity and the specific insurer's guidelines. Some insurers will underwrite based on the gender assigned at birth, while others will honor the individual's current gender identity. Mental health and the effects of hormone therapies are also considered during the underwriting process and can impact insurance pricing.

Gender-specific conditions and their impact on rates

Gender-specific conditions can impact the rates of life insurance for both men and women. For women, these conditions can include ovarian or breast cancer, pregnancy, and hormonal conditions. For men, these conditions can include prostate or testicular cancer.

Men generally pay more for life insurance than women due to a shorter average life expectancy and a higher risk of an early heart attack, among other risks. The average lifespan of a man is 74, while that of a woman is 79. This five-year difference increases the likelihood of a life insurance company having to pay a death benefit, which results in higher rates for men.

The age at which an individual is likely to die is a critical factor in determining life insurance rates. The longer the insurer expects to collect premiums and the less likely they are to pay a claim, the lower the premiums will be. This is reflected in the fact that older individuals tend to pay higher life insurance rates than younger ones.

In addition to gender-specific conditions, other factors that can impact life insurance rates include age, family medical history, health history, lifestyle risks, policy benefits, and risky activities. Comparing policies from different insurers is essential to finding the best coverage and rates.

Life insurance for transgender people

Transgender people can get life insurance coverage, but the process can be challenging and may require shopping around for a suitable company and policy. Some life insurance companies underwrite transgender applicants based on the gender assigned at birth, while others use the applicant's stated gender. This means that, when applying, it is important to be prepared to explain transness to the agent and to shop around for a provider that will work with your profile.

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 live longer than people assigned male at birth (AMAB) on average, so the latter are typically required to pay slightly higher rates.

Some companies ask for "gender" instead of "sex", treating these terms as interchangeable. 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. This is because life insurance companies often check medical records, which may list the sex assigned at birth rather than the applicant's lived gender. Indicating your sex assigned at birth avoids any technical discrepancies that could lead to delays in getting coverage.

Preparing to work with a life insurance agent

While many life insurance companies provide LGBTQ+ issues training to employees, there is no guarantee that the agent you work with will be knowledgeable about trans and nonbinary identities. C.P. Hoffman, senior policy counsel at the National Center for Trans Equality, says that applicants should be prepared to explain transness to someone who probably doesn't understand it.

Working with a life insurance broker or agent 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. 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)

How being trans can affect life insurance premiums

Your identity as a trans or nonbinary person will not affect your premium cost. However, certain factors that are more common among transgender people may affect your premium cost. These include:

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

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, agents will ask follow-up questions, particularly whether or not the surgery requires general anaesthesia because of its association with serious complications. If the risk is deemed high, your application will likely be postponed until after the surgery is complete and you have physically recovered.

Insurance coverage alternatives for trans and nonbinary people

Life insurance alternatives include:

• Funeral and burial prepayment
• Payable-on-Death account (POD)
• Personal loan

The wage gap and life insurance

The gender pay gap is a well-known issue, with women earning only 82 cents to every dollar earned by men. This disparity has significant implications for life insurance coverage and rates. Life insurance coverage limits are often determined by multiplying annual earnings, resulting in women having lower coverage than men. According to the Bureau of Labor Statistics, the average salary for men is $55,744, while women earn $46,488. Using a common multiplier of 10, the average woman could have $925,600 less coverage than the average man.

The gender wage gap is further exacerbated by the fact that women's unpaid labor, such as childcare and housekeeping, is often undervalued. This unpaid labor has immense financial value, estimated to be worth $178,201 to $184,000 annually. When determining life insurance coverage, it is crucial to consider the monetary value of these contributions, as the loss of a stay-at-home parent would create a significant financial burden for the surviving family members.

While the insurance industry is shifting towards recognizing the financial value of unpaid labor, traditional models of life insurance have relied on salary as an indicator of coverage. This has resulted in the devaluation of the impact of a spouse with a lower salary or a stay-at-home parent. However, it is important to note that the work done in the home contributes to significant financial savings for families, and this should be reflected in life insurance policies to ensure sufficient coverage for beneficiaries.

To minimize the life insurance gender gap, it is essential to understand the underlying causes, such as the wage gap and the undervaluing of unpaid labor. By considering the monetary value of household tasks and ensuring adequate coverage for both partners, we can work towards closing the gap and providing equal opportunities for financial security.

Life insurance for non-binary people

Being non-binary does not disqualify a person from getting life insurance. However, non-binary people are required to apply for life insurance as either male or female, despite the growing awareness that not everyone identifies as a binary gender. This means that non-binary people are subject to the same gender-based rates as binary people.

How Insurers Set Premiums

Life insurance premiums are based on many factors besides gender, including:

• Physical characteristics: Age, build (height and weight), blood pressure, cholesterol levels, and chronic health conditions.
• Lifestyle characteristics: Tobacco use, occupation, illegal drug use, driving record, criminal record, bankruptcy, travel to dangerous countries, and participation in high-risk recreation.
• Medical history characteristics: Physical and mental health history, surgical history, family health history, and prescription history.

Factors Affecting Non-Binary Applicants

Certain factors may be more likely to affect non-binary applicants and the rates they pay for insurance, including:

• Build (height and weight): The tables underwriters use for this purpose are different for men and women, so a non-binary applicant could pay higher or lower rates depending on whether they are underwritten as male or female.
• Mental health history: Non-binary people may face more microaggressions, discrimination, and harassment as they live and work within a primarily binary system, resulting in poor mental health. A mental health diagnosis may mean paying higher insurance premiums, as suicide is one of the leading causes of death in the U.S.
• Physical health history: Non-binary adults experience higher levels of discrimination in healthcare settings, have more unmet healthcare needs, engage in more health-harming behaviors, and are less likely to have an annual health exam than other transgender groups.
• Surgical and prescription history: Non-binary individuals sometimes have gender-affirming surgery or take gender-affirming medications, which can affect life insurance premiums as these surgeries can have complications that make an applicant a riskier prospect to insure.

Tips for Non-Binary Applicants

• Speak with an agent before applying: Consider working with an LGBTQ-friendly, licensed life insurance agent who can explain any potential barriers and match you with an insurer and plan.
• Get employer-based group life insurance: If your employer offers life insurance, you can sidestep a potentially awkward application process and may qualify for lower rates without medical underwriting.
• Find a non-binary-friendly life insurer: Look for LGBTQ-friendly companies, such as those listed by the Sexuality and Gender Alliance of Actuaries.

Frequently asked questions