Amy Fontinelle
May 27, 2024
Identifying as nonbinary doesn't disqualify a person from getting life insurance. Still, you must apply for life insurance as either male or female, despite the widening awareness that not everyone identifies as a binary gender.
KEY TAKEAWAYS
- Being nonbinary doesn't disqualify you from getting life insurance or automatically mean higher insurance rates.
- However, certain health conditions more common among nonbinary people may result in higher premiums.
- Regardless of your gender identity, each insurer assesses every applicant's risk differently. One insurer might offer its standard rate, while another might provide a preferred rate, even though both insurers base their decision on the same information.
Why Life Insurers Ask About Gender
Life insurers ask about gender because of the correlation between sex assigned at birth and mortality. Women around the world typically outlive men. For example, the Social Security Administration's most recent actuarial life tables assign an average life expectancy of 73.54 years to newborn boys and 79.30 years to newborn girls—nearly a six year difference. A longer life expectancy means a lower probability of the life insurer having to pay a death benefit on any given policy.
Whether people who identify as nonbinary have significantly different life expectancies than those who are cisgender (meaning individuals who identify as the same sex assigned them at birth) is unknown. There are only an estimated 1.2 million people in the U.S. who identify as nonbinary, and most are under age 29. Actuaries may not have the data they need to devise rates tailored to nonbinary individuals.
Because people who openly identify as nonbinary make up such a small percentage of the U.S. population, there also may not be much incentive for life insurers to update their policies. Even when there is an incentive, changing long-established business practices, especially in a highly regulated industry like the insurance business, can be a slow process.
Fast Fact: In every state except Montana, life insurers can charge different rates based on sex.
Choosing a Gender on Your Life Insurance Application
At some point, we may see more than two options on life insurance applications—or not even have to answer the male or female question. Right now, that's not the case.
But according to Mark Friedlander, director of corporate communications at the industry-sponsored Insurance Information Institute, "A lesbian, gay, bisexual, transgender, queer/questioning, intersex, or asexual individual can apply for the same type of life insurance as anyone else, with the same application. There is no variance in the underwriting process for LQBTQ+ applicants."
Jake Tamarkin, co-founder and CEO of Everydaylifeinsurance.com, says his company and "more forward-looking firms," use terminology like "sex at birth" on applications, because underwriters tend to default to what was on someone's birth certificate for pricing purposes. Then, he seeks quotes from multiple life insurance underwriters for clients and sees varying terms used. "With over 700 life insurance companies operating in the U.S. today, the terminology on their applications will vary," he says.
He has noticed a change in the past 10 years. A decade ago, perhaps 90% of the forms would have only referred to gender, he says. "More companies recently began using 'sex' instead, I believe, in an attempt to be more precise," as gender can have a more expansive meaning.
In a blog post on underwriting applicants who are transgender, Stephen D. Forman, CLTC (Certified in Long-Term Care), noted that the life insurers he works with were more likely to underwrite a policy based on the current gender an individual identifies as, not the gender assigned at birth.
While choosing male or female likely won't be a nonbinary person's preference, checking one box or the other may not significantly affect your rates overall. Life insurers review many factors to decide on an applicant's insurability and to set the rates they'll have to pay. That's true, no matter who you are or how you identify.
How Life Insurers Set Premiums
Life insurance premiums are based on many factors besides gender:
- Physical characteristics: Age, build (height and weight), blood pressure, cholesterol levels, chronic health conditions
- Lifestyle characteristics: Tobacco use, occupation, illegal drug use, driving record, criminal record, bankruptcy, travel to dangerous countries, participation in high-risk recreation
- Medical history characteristics: Physical and mental health history, surgical history, family health history, and prescription history
All of these factors can influence the age at which someone is likely to die. The longer the insurer expects to collect premiums and the less likely the insurer is to have to pay a claim, the lower the premiums.
Certain factors may be especially likely to affect nonbinary individuals and the rates they'll pay for insurance. Those include:
Build (Height and Weight)
As mentioned, your height and weight—and your body mass index (BMI) as derived from those numbers—are an important factor in determining your eligibility for life insurance and in setting your premiums. The tables underwriters use for that purpose are different for men and women.
Applicants at the high or low end of what's considered an acceptable weight for their height could potentially pay a different rate depending on the gender they are underwritten as. An insurer might, for example, set 30 as the upper limit for BMI for a male to get the best rates, but 28 as the upper limit for a female.
So a nonbinary applicant could pay higher or lower rates depending on whether they are underwritten as male or female.
Mental Health History
Receiving any mental health diagnosis may mean paying higher insurance premiums. Life insurers take some diagnoses, such as major depressive disorder, very seriously because suicide is one of the leading causes of death in the U.S., according to the Centers for Disease Control and Prevention (CDC), which notes that males commit suicide at about four times the rate of females.
According to research, nonbinary people may face more microaggressions, discrimination, and harassment as they live and work within a primarily binary system, resulting in poor mental health.
The severity of a condition and how it's been managed can influence how an insurer weighs a mental health diagnosis in deciding whether to offer someone a policy and at what cost. Some insurers, for example, rate a diagnosis of depression more favorably than others. One company might give people with that diagnosis its most preferred rates despite their mental health history, while another might charge them substandard rates.
Someone with mild to moderate depression or anxiety being treated with a maximum of two medications, neither of which is an antipsychotic, may still be eligible for the best rates, depending on the insurer.
At the other extreme, a suicide attempt within the past two years can make someone uninsurable for the time being, as can a mental disorder requiring hospitalization within the past year. An attending physician statement may be necessary for approval after that.
Physical Health History
An insurer will assess your current physical health and health history with a questionnaire and, potentially, an in-person exam or lab tests. A medical exam will typically be with an examiner who may gather the following:
AIG Direct. "What to Expect Before & During the Life Insurance Medical Exam."
- Medical history details
- Height, weight, pulse, and blood pressure measurements
- Blood and urine sample
According to one study, among those with health insurance, the odds of fair/poor health for nonbinary adults were more than twice that of transgender men and over 1.5 times higher than for trans women. The study did not compare the health status of nonbinary vs. cisgender individuals.
The authors of the study noted that nonbinary adults "experience higher levels of discrimination in healthcare settings, have more unmet healthcare needs, engage in more health-harming behaviors (i.e., drug/alcohol abuse, smoking, and attempted suicide), and are less likely to have an annual health exam than other transgender groups."
Important: Not all insurers will interpret health results the same way, and nonbinary people can reduce the cost of premiums through various approaches, such as quitting smoking and working with an LGBTQ-friendly healthcare provider to get routine physicals.
Surgical and Prescription History
Nonbinary individuals sometimes have gender-affirming surgery or take gender-affirming medications. A nonbinary person assigned female at birth may have breast reduction surgery, and a nonbinary person assigned male at birth may have breast augmentation surgery. But overall, nonbinary transgender adults typically report significantly lower rates of medical/social transition compared with transgender women and transgender men.
Because life insurers consider surgical history when evaluating any applicant, any gender-affirming surgery could affect life insurance premiums. Gender confirmation surgeries can have complications that make an applicant a riskier prospect to insure.
The use of certain medications can also affect premiums. In some cases, they may lower premiums by demonstrating treatment to improve mental health. Alternatively, they may increase premiums if there are health risks associated with the drug or the condition it is intended to treat.
Tips for Life Insurance Applicants Who Are Nonbinary
In addition to understanding how insurance companies evaluate applicants, there are some other things you can do to make the process work for you.
Speak With an Agent Before Applying
It may be appealing simply to go online to purchase insurance and minimize potentially uncomfortable interactions with people during the application and underwriting process. But you may have more success by speaking with an LGBTQ-friendly, licensed life insurance agent who can take the time to 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. Because it is a group policy, you may also qualify for lower rates without medical underwriting. The downside is that you might not get enough coverage through your employer. You could also lose coverage if you get laid off or change jobs, unless the insurance is portable.
Find a Nonbinary-Friendly Life Insurer
To find life insurers more likely to treat you respectfully, you might start with a few organizations that list LGBTQ-friendly companies.
For example, the Sexuality and Gender Alliance of Actuaries' list of sponsors could be a good starting place.
Why Isn't Life Insurance Specifically for People Who Don't Identify as Male or Female Available?
The main issue is that insurance policies are priced based on actuarial tables that provide insurers with estimates of men's and women's life expectancies. Because nonbinary individuals represent a small fraction of the population, and because many are still quite young, actuaries have little data to go on in estimating their life expectancies as a group.
Do Nonbinary People Need Life Insurance?
People buy life insurance for a variety of purposes. It can be used to pay final expenses, provide an inheritance, or help a partner pay off a mortgage after the policyholder's death. In one survey by an industry group, 75% of LGBTQ individuals said they believed they needed life insurance, but just 42% reported having it. However, 44% said that they planned to buy life insurance "this year" (2023).
Is Gender X the Same as Nonbinary?
While some insurers use the terms interchangeably, others define Gender X in a broader way. The U.S. State Department, which now offers an "X" option on passports, refers to it as meaning simply "Unspecified or another gender identity."
The Bottom Line
The dominant culture in the U.S. treats gender as binary: You're either male or female. Life insurers do this, too. However, some changes may be on the horizon. For example, 22 states plus the District of Columbia allow driver's license applicants to chose the alternative gender of "X" instead of limiting them to "M" or "F" as was long the practice. Since 2022, U.S. passports have offered that option, as well.
Other legal documents, including birth certificates, increasingly recognize nonbinary as a gender identity. "Customers are beginning to ask for forms and applications to include nonbinary options as well—so they're not forced into a false selection," noted a 2020 article in The Actuary magazine.
