How Being Nonbinary Affects Getting Life Insurance

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.

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 an example, you can look at the Social Security Administration’s actuarial life tables. You’ll see that a boy born in 2020 has a life expectancy of 74.12, while a girl born in 2020 has a life expectancy of 79.78. A longer life expectancy means a lower probability of the life insurer paying a death benefit on any life insurance policy.

“Life insurance underwriting frameworks are backwards looking by design—based on actuarial studies of large sets of historical data—so are susceptible to being dated in how they categorize people for risk-analysis purposes,” said Jake Tamarkin, co-founder and CEO of Everydaylifeinsurance.com. He noted that the frameworks are also highly regulated and are not easily or quickly changed. 

Do people who identify as nonbinary have significantly different life expectancies than those who are cisgender? There are only 1.2 million people in the United States who identify as nonbinary, and most are under age 29. Actuaries may not have the data they need to offer nonbinary individuals rates that are different and potentially more accurate. At the most basic level, death certificates lack standardized gender identity data.

Individuals who openly identify as nonbinary make up a small percentage of the U.S. population, and there may not be much incentive for life insurers to update their policies to serve a small group. Even when there is an incentive, changing long-established business practices, especially in a highly regulated industry, can be a slow process.

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, we don’t. Which box should you check when you don’t identify with either and when your answer could affect how much you’ll pay for insurance? Finding the right way to proceed may be difficult.

Jack Dolan, vice president of public affairs at the American Council of Life Insurers (ACLI), a public policy advocacy organization, said his organization doesn’t have data on individual insurance carriers’ underwriting practices, and that the criteria they use is proprietary. But he noted that « carriers’ underwriting practices, including the reflection of [a] person’s sex, vary.”

Tamarkin’s firm and “more forward-looking firms,” as he notes, use terminology like « sex at birth » on applications. Tamarkin says his company asks applicants for their sex at birth, as 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,” he said, 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, selecting a box may not significantly affect your rates overall. Life insurers review many factors when setting an applicant’s premiums, and all go into determining the consumer’s insurability and how much the person will 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 these factors influence the age at which someone is likely to die. The longer the insurer expects to collect premiums and the less likely the insurer will pay a claim, the lower the premiums.

Premiums can also be influenced by the type of life insurance, the amount of insurance purchased, and the length of a term life insurance policy.

Often, insurers look at an individual within the context of risks. For example, smoking can instantly place you in a lower underwriting class, meaning you’ll pay more.

However, certain factors are especially likely to affect nonbinary individuals and may lead to paying extra for insurance.

Build (Height and Weight)

One underwriting area directly affecting your premiums is your height and weight, body mass index (BMI). Many insurers still use it to determine whether an applicant’s build puts them at higher risk of premature death. And the build tables underwriters use are different for men than for 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 say 30 is the upper limit for BMI for a male to get the best rates, but 28 is the upper limit for a female.

However, the applicant with this build who is underwritten as female may pay less as a female than the applicant who is underwritten as male.

Mental Health History

Receiving any mental health diagnosis may mean paying higher insurance premiums. Life insurers take some diagnoses, such as major depressive disorder, incredibly seriously because suicide is the second leading cause of death in the United States, according to a 2020 report by the Centers for Disease Control (CDC). Males commit suicide at four times the rate of females.

Nonbinary people may face more microaggressions, discrimination, and harassment as they operate 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 give 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:

• 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 notes that health insurance typically produces better access to healthcare and improved health outcomes among the general population. But 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, » the study notes.

However, 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 to transgender women and transgender men.

Since 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.

Depending on medication and the insurer, such medications could lower premiums by demonstrating treatment to improve mental health. Alternatively, these medications could increase premiums because of any health risks associated with the drugs and the conditions they treat.

Tips for Life Insurance Applicants Who Are Nonbinary

Speak With an Agent Before Applying

It can be appealing to consider leveraging technology to 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, it can be a great way to sidestep a potentially awkward underwriting process and higher rates because you’ll get insurance at low group rates without medical underwriting. The downside is that you may not get enough coverage through your employer. You may 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 insurers.

For example, the Human Rights Campaign Foundation’s Corporate Equality Index companies list top-rated places to work for LGBTQ individuals. You can search for an insurer in HRC’s Employer Search to see how it treats its LGBTQ employees, which might signal increased awareness regarding life insurance. However, just because an employer is listed doesn’t mean that the life insurance form will offer a nonbinary option on the application.

Similarly, the Sexuality and Gender Alliance of Actuaries’ list of sponsors may be another good starting place.

Consider Final Expense Insurance

According to a 2022 survey by a life industry insurance organization, 63% of LGTBQ people are interested in life insurance coverage to pay for final expenses.

Final expense coverage can be a less-expensive, less-invasive insurance application and process. A questionnaire may be the only requirement, not a medical exam. However, you may pay a higher monthly premium for very limited death benefits.

The Bottom Line

The dominant culture in the United States treats gender as binary: You’re either male or female. Life insurers do this, too. “Unless you live in Montana, if you want life insurance, you will need to accommodate this outmoded framework, very probably for years to come,” Tamarkin said.

However, some changes may be on the horizon. For example, recent changes in New York allow state residents to choose a nonbinary gender or « Gender X » on a New York State driver’s license or identification card. New York State Department of Financial Services advised insurers offering car insurance in New York to accommodate nonbinary applicants by amending auto insurance applications, underwriting practices, and rating plans.

The state notes that future approaches may include using a weighted average of the male and female rating factors or removing the gender rating factor for individuals who select Gender X.

Nonbinary genders are increasingly available on legal documents such as birth certificates and driver’s licenses. « 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.