Today’s life insurance industry has products available that are inclusive of the needs of all consumers, including the 1.4 million adults in the U.S. who identify as transgender. Whether the need is for mortgage protection, estate planning, financial security for a spouse or children, or living benefits such as retirement income or long-term care, there are products designed to fit the specific need. Most important, with innovations such as accelerated underwriting programs, the process of obtaining coverage has never been easier.
For those who are part of the transgender community, gender dysphoria (a clinical diagnosis) should not interfere with the ability to obtain coverage and in general transgender applicants’ rates are assessed based on gender as declared on the life insurance application versus gender assigned at birth regardless of surgical or hormonal interventions. There may be slight variations based on a state’s legislation regarding the application and insurance company product design, so it is important to work with a licensed life insurance professional and a knowledgeable brokerage general agency for direction on the best product pricing in the state of application.
For any client, the underwriting process for life insurance can take different paths, including mobile app, instant decision, accelerated, simplified and traditional underwriting. Electronic health records, motor vehicle reporting, financial data, lab results, traditional attending physician’s statements, blood draw and urine voiding are some types of information that can be used individually or in combination to assess the overall mortality of an applicant for life insurance and result in a final pricing that is based on each company’s own mortality experience.
Product pricing is coordinated between an insurance company and each state’s department of insurance with insurance companies submitting (filing) product rates for each product and state in which they have approval to sell that product. The pricing rates can be based off male, female or unisex rates; again, determined by state and product pricing requirements and design. Each insurance company adheres to the respective state’s criteria for designing and pricing of its products, going through rigorous state approval processes and protocols for each product it submits for approval.
Each product’s base level pricing is based on standard rates, which are actuarially calculated for normal life expectancy for the applicant’s age. Better than standard or worse than standard rates are possible depending on the mortality information developed in the assessment/data collection part of an insurance company’s underwriting process. In general, most life insurance contracts are approved and issued at standard or better pricing and the cost of insurance/insurance rates continue to be priced very aggressively. Information obtained that could possibly result in a client receiving a worse than standard pricing offer would include a medical history of conditions such as diabetes, cancer, coronary artery disease or tobacco use, to name a few.
With continued improvements in product pricing, product innovations, and the process itself that allow for rapid approval of coverage without the traditional requirements of exam, blood and urine, it has never been easier, less expensive and faster to obtain the needed and desired coverage.
Chris Cook is senior vice president and head of underwriting at Crump Life Insurance Services. Chris may be contacted at [email protected].