The LGBTQ community has made significant strides in recent years, winning legal, political, and cultural victories, including the right to marry. But the community is still marginalized; 62 percent of LGBTQ respondents to a recent Experian survey say they’ve faced financial challenges because of their sexual orientation or gender identity.
It’s even more important for members of marginalized communities to make sure they’re financially secure, says John Schneider of the Queer Money podcast and Debt Free Guys blog.
“It’s important for us to be more financially responsible than the general population,” he says.
Congress is currently debating the Equality Act, which would prohibit discrimination based on sexual orientation and gender identity. That being said, there is currently no federal law prohibiting discrimination based on sexual orientation in the areas of employment, housing, or access to services, according to Human Rights Watch.
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LGBTQ victims of hate crimes were the third most targeted group in 2017, according to FBI crime data. The impact of these and other risks is only greater without financial protection, Schneider says.
“Skipping insurance puts you in a more risky category than you otherwise would be,” he says.
One way to increase financial wellness involves buying life insurance and disability insurance. Here’s what LGBTQ people shopping for insurance should know.
1. Get Help
Most LGBTQ people applying for insurance shouldn’t face any special challenges, particularly the LGB part of the population, says Ryan Taylor, founder and president of LGBT Financial, a financial services firm in Utah. But those who think they might should get help from an adviser who is experienced with LGBT issues.
You can check with your local LGBTQ chamber of commerce or the National LGBT Chamber of Commerce to find an insurance adviser, Schneider says. Other members of the LGBTQ community may also be able to help.
2. If You Take Truvada …
Until 2012, Truvada was a drug solely used to treat HIV. That year the Food and Drug Administration approved its use as pre-exposure prophylaxis, or PrEP, to preventHIV, as well. Public health officials consider it a major breakthrough in the fight against HIV.
But some gay men taking the drug have reportedly had trouble getting insurance. Regulators in New York are investigating reports that people “taking HIV-prevention drugs are receiving discriminatory treatment in the purchase of disability insurance,” says Maria T. Vullo, New York financial services superintendent.
Insurers take time to adjust to new drugs.
For example, ratings used to be more punishing in the past for people who took ADHD drugs, but they’ve become more lenient as the use of such medication has become more widespread. Truvada was once taken exclusively by HIV-positive people, and insurers don’t have as much data on its use as PrEP.
“This is something the carriers are still learning about,” says Tyler End, certified financial planner and general manager for disability product for Policygenius. “If they don’t have enough data, they’re always going to err on the side of caution.”
Taylor says an LGBT-friendly adviser can help in this case, as well. He’s had success challenging insurance underwriting standards for clients who take PrEP.
“I’ve been pleasantly surprised that most of the insurers I’ve talked to and challenged for clients have at least been willing to do a full review of their underwriting policies, and several changed underwriting policies,” he says.
Daniel Bruner, senior director of policy for Whitman-Walker Health, a community health center and the largest prescriber of Truvada in the Washington, D.C., area, is concerned insurance denials may lead people to stop taking PrEP. Such denials also make little sense, because Truvada helps prevent health risks, he says.
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“Would you rather somebody contract HIV and then the insurers are going to be on the hook to pay for that health care potentially for the rest of that person’s life?” Bruner says. “Our hope is if insurers are thinking clearly, they’ll realize this is a silly and counterproductive thing to do.”
In the event of a denial, Bruner says people should contact LGBT legal organizations like Lambda Legal and GLBTQ Legal Advocates & Defenders, as well as their state insurance regulator, to challenge the decision.
3. If You’re Trans …
Trans people are likely to have the most difficulty in getting insurance, Taylor says. There is little precedent for insurers to base underwriting decisions on, especially for people going through a gender transition that can have unpredictable health effects.
“Insurers, which are typically very conservative in nature, have a very hard time adapting,” Taylor says.
Some insurers offer unisex ratings, but they may not always be advantageous for an individual client, who may get a better price applying as a man or woman, Taylor says.
4. Shop Around
One other thing you can do if you feel discriminated against: Take your business elsewhere. “If you are denied by your current provider, find a good broker and see if you can find a different provider,” Schneider says.
Whit Cornman, a spokesman for the American Council of Life Insurers, an industry group, says underwriting decisions are based on a number of factors, including height, weight, blood pressure, cholesterol, blood sugar, smoking status, and medical history. There are hundreds of different insurance companies that may each weigh these factors differently.
“As a result, insurers might evaluate the same applicant differently and therefore make different decisions on issuance, pricing, etc.,” Cornman says. “Because underwriting decisions vary by company, we recommend applicants shop around to find the best policy for them.”
5. Don’t Be Afraid to Apply
Only six states have laws banning insurers from factoring sexual orientation into underwriting: California, Colorado, Delaware, Utah, Vermont, and Washington. There’s no federal law prohibiting discrimination in underwriting. But LGBTQ people shouldn’t avoid insurance, Taylor says.
Taylor sometimes finds it difficult convincing young clients to apply, not only because they fear they’ll be denied, but also because they don’t put a priority on their future finances. But the more LGBTQ people apply, even if they’re denied, the more visible they become to the insurance industry, he says.
“We have to band together to make change happen,” Taylor says.
“Hopefully we can get companies to change right now and adapt or at least make exceptions, and we can get the insurance in place.”
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Where to Start
Insurance is complicated, it’s true. But here’s a primer on the basics to help you shop for life insurance and disability insurance, specifically.
Term vs. whole: Term life insurance lasts for a set period of time, usually up to 30 years, then expires. Whole life insurance lasts your entire life and comes with a cash value component that’s best described as a forced savings vehicle. Whole life insurance is also much more expensive. That’s why term life is the best fit for most families. Whole life is worth considering if you have a complex estate or special needs dependents.
Determine how much coverage you need by taking stock of the big financial obligations your family relies on you to cover, along with future expenses, like college tuition. Most people also consider funeral costs when choosing a coverage limit. You can also use a life insurance calculator to help.
Determine how long your coverage should last by pinpointing your biggest financial burden (usually a mortgage) and how long you expect your current dependents to rely on your income.
Spouses have options when it comes to purchasing life insurance. You can opt for a joint policy, two individual policies, or a single policy with a rider for a stay-at-home parent.
Long-term vs. short-term disability insurance: Short-term disability insurance lasts only a few months, while long-term disability insurance can last until retirement, though it may not kick in as quickly after an illness or injury. Both provide insurance for your income if you’re unable to work.
How much long-term disability costs:The average cost is between 1 and 3 percent of your salary, depending on factors like your age, gender, smoking history, state of residence, occupation, and the policy itself.
Want to get a better idea of the cost? You can compare policies right here.
Additional reporting by Connor Beckett McInerney.
This article originally appeared on Policygenius on June 20, 2018.
Disclaimer: Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.