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‘The life and health insurance industry recognizes that it needs to adapt to the changing environment to ensure that everyone who applies for insurance will be assessed fairly,’ an internal position paper from the CLHIA states.

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Life and health insurers are placing a greater focus on assessing the risks involved when transgender people decide to make the transition to the gender of their choosing, with some companies making changes to meet the shifting needs of the marketplace.

“A person’s sex or gender is one of the factors that may have an impact on risk,” states an internal Canadian Life and Health Insurance Association Inc. (CLHIA) position paper the organization shared with The Globe and Mail. “The life and health insurance industry recognizes that it needs to adapt to the changing environment to ensure that everyone who applies for insurance will be assessed fairly.”

Some insurers have taken the approach that individuals looking for life insurance coverage can identify both their sex at birth and their current gender identity, while others say it’s okay not to disclose either, says Kevin Dorse, assistant vice-president, strategic communications, at the CLHIA.

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For transgender people who apply for life insurance coverage at Sun Life Financial Inc., the premiums are based on the sex designated at birth. In addition, clients are asked about their personal and family health histories as well as their lifestyle and life situations, says Sharon B. Smith, chief underwriter and claims risk officer at Sun Life, in a statement: “This includes any major medical procedures that have an impact on their current health or planned future procedures. Underwriting assessments are unique and are based on the risks presented by each individual client.”

If a client has a health issue, then a higher price is charged for the insurance policy, but the fact someone is transgender doesn’t fit into that equation, says Peter Seligman, founding partner and estate and insurance advisor at Seligman Insurance in Toronto.

“But if the person has had transgender surgery, the insurance company will want to wait six months [before issuing a new policy],” says Mr. Seligman, who has a client whose son recently made the transition to become female. “That has to do with the follow-up and complexity of any surgery. If you had cardiac surgery or received or donated a kidney, [insurers] wouldn’t look at you until after six months [either].”

One issue that insurers will take a close look at in the case of a transgender client is that person’s psychological state, he says. There’s a high rate of depression among transgender individuals and insurers will look at whether they’re taking anti-depressants and anti-anxiety medications when rating the risks on that policy.

“The biggest underwriting issue is the mental state, not the physical state,” says Mr. Seligman.

According to a study conducted in 2016, Mental Health Disparities Among Canadian Transgender Youth, and published in the January 2017 edition of the Journal of Adolescent Health, although a “notable minority of transgender youth did not report negative health outcomes, mental health disparities faced by transgender youth in Canada are considerable.”

Specifically, the study found that transgender youth "had a higher risk of reporting psychological distress, self-harm, major depressive episodes and suicide. For example, 65 per cent of transgender 14- to 18-year-olds seriously considered suicide in [2016] compared with 13 per cent in the British Columbia Adolescent Health Survey, and only a quarter of [transgender survey] participants reported their mental health was good or excellent.”

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Although there are no official estimates of deaths by suicide among those who have made the transition to another gender, a study published in Sweden earlier this decade states that people who undergo gender-affirmation surgery were at 19 times greater risk of dying by suicide than the general population.

In April of 2014, the Canadian Psychiatric Association published an article titled Mental Health Care for People Who Identify as Lesbian, Gay, Bisexual, Transgender, and (or) Queer, which cites the importance of family acceptance and that “LGBT youth who come from highly rejecting families are more than three times as likely to have attempted suicide than LGBT peers who reported no or low levels of family rejection.”

Mr. Seligman says he knows of one person who had transgender surgery and whose depression has become so severe the person has become a recluse. That individual’s father has taken on additional life insurance to leave assets for the adult child, recognizing the financial impacts of the surgery and the potential likelihood that the individual will never be financially self-sufficient.

Even though the transgender adult child is insurable, the family is sensitive to anything related to health. The client has other adult children, all of whom were insured several years ago.

“I am suggesting to the family that they do some planning for the kids because they don’t want to even raise the need for a medical exam, which is standard protocol for insurance,” Mr. Seligman says.

But if parents make special provisions for a transgender child, Mr. Seligman says it’s crucial to have an open and frank discussion with other members of the family ahead of time and discuss why one child will receive more assets than the others when the parents pass away.

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He notes that the privacy of the transgender individual suffering from mental health issues must be maintained, even if the client relationship is with the parent. Mr. Seligman suggests advisors first meet face-to-face with the transgender individual to build trust, then contact the insurers with which their businesses are affiliated to find out what these companies’ policies are so that they can advise the client accurately. Specifically, he advises contacting the insurers’ medical underwriting departments to ask the insurer what it will take to get the insurance coverage.

When it comes to group benefits, the level of scrutiny is much lower than it is when dealing with life insurance, says Neil Iddon, director, employee benefits at Associum Benefits in Toronto. But even then, being transgender is not considered a risk factor.

There may be an issue with increasing long-term disability benefits if there is a history of depression, but he says this is really no different for a transgender person than it would be for a person who identifies with the gender of their birth.

“For the insurance company, there is a real risk if they know someone may be going off on a long stress leave. Even if someone has a history of post-partum depression, that’s considered,” said Mr. Iddon. “My impression right now is that the underwriting [for group benefits] is fairly even-handed, but that’s not to suggest that it shouldn’t be a little more focused … on the [needs] of a person who is transgender.”

Sun Life is one insurer that’s placing a greater focus on those needs. In late March, the company introduced coverage for gender-affirmation procedures through the extended health-care benefit plans it makes available to employers.

Employers can offer “core coverage,” which pays for basic surgical procedures that aren’t covered by an individual’s provincial or territorial health-care plan, such as reduction of the Adam’s apple or voice surgery, or “enhanced coverage,” which covers surgical procedures to align masculine or feminine features to the individual’s transitioned gender, such as facial bone reduction or cheek augmentation.

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