Transilliness

So a while back, we blogged on the potential issues one might face as a trans/other-American in the market for life insurance. It’s now back in the news (sorta) due to this rather silly Tweet:
 

An actuary on the staff at the National Association of Insurance Commissioners is wondering whether, and how, the existence of nonbinary people might affect the world of life insurance.@naic https://t.co/w66AR7pAhd

— ThinkAdv Life/Health (@TA_LifeHealth) September 3, 2019

It’s silly because (for starters) trans/other Americans comprise barely a rounding error of the general population. Actuaries, by definition, work with very large groups, not infinitesimally-small ones, which would yield an essentially meaningless sample.

But wait, it gets “better:”

Actuaries estimate “probability of risk,” that is, the likely number of expected deaths from a (again, large) population; it’s merely a pricing tool.

The only opinion that matters here is the underwriter’s, because his job is assessing the specific risk, and then deciding whether or not it’s acceptable, and at what premium (rating factor).

In the event, neither of these folks would ever even see such an application in the first place, for a very simple reason: all life applications require one to provide name, social security number, date of birth, and sex (among other things). Applications missing this information will be returned to the agent for completion.

There’s also the small problem of the “misstatement of age or sex” clause, which would come into play at claim time.

But even more important, from that underwriter’s point-of-view, is this:

“As I discussed with a life field rep friend a while back, the life company is likely to decline the case altogether because of the increased suicide risk.”

By the way, these issues would also come into play with auto, disability income, long term care and other types of insurance, as well. Which means a lot of wasted time for a trifle.

Talk about much ado ….