If you’re LGBTQ, you may be fully exploring what it means to be able to build your life around who you love. Strong legal protections in the last 15 years have ushered in more than just external changes. According to MassMutual financial advisor Mindi Wernick with Lee, Nolan & Koroghlian in New York City, these protections have provided validity and certainty, creating an important psychological shift.
“Now that gay couples are seen in the eyes of the law as equal, they can build their lives around who they love,” she says. “They’re joining finances, and doing more traditional things, like buying life insurance.”
The big shift in life insurance for the LGBTQ community
“Previously, life events like getting married and having children were coming up more often for straight couples,” says Tristan Bills, the owner of The Endeavor Agency, an insurance brokerage in Salt Lake City. “Now things are changing where we have same sex marriage, adoption and surrogacy. We ask about life events with every single customer.”
Even so, according to LIMRA, just 38% of LGBT households own individual life insurance, compared to 44% of the general population. The reasons are deeply historical and often gender-specific.
A stubborn challenge
Life insurance has to do with “money, mortality and who you love, all in one conversation. That’s hard to begin with,” explains Wernick. Historically, LGBTQ people have found this especially challenging. Not long ago, disclosing sexual orientation to the wrong person could be career-ending. “Some of my clients today are still closeted,” she adds.
Hand in hand with this reality: a significant lack of LGBTQ representation in the financial services space. Wernick, mother of three sons with her now-wife and partner of 23 years, reports that she is the only gay woman she knows of in her wealth advisory firm, in an industry where just 24% of the sales force is female. Many gay consumers, especially women, she says, feel “no connection” with a typical insurance agent.
As a result, “LGBTQ people come to the party kind of late, and that’s when coverage is more expensive.” The price of life insurance depends on your age and health, among other factors. The younger and healthier you are, the lower your rate.
The double whammy for lesbian couples
Earning disparities and common gender-based attitudes around money tend to hold women back financially, which can be exacerbated for lesbian couples, says Wernick.
“Women are primed to be proactive about their health. Men are proactive about their wealth. They measure themselves by how much money they have. Women often don’t take their financial lives seriously enough, early enough. We measure ourselves by different standards — by the quality of our relationships, by how much time we spend volunteering, by how much we nurture our talents, by how often we’ve used our Peloton.”
What surprises everyone about life insurance
Gay or straight, however, Wernick says, “I think everyone is surprised at how cheap term life insurance is.” Consumers overestimate the cost of life insurance by up to five times the actual amount, according to the 2021 Insurance Barometer Study, by Life Happens and LIMRA. In fact, a healthy 30-year-old can get a $250,000 20-year level term policy for about $13 a month.
In addition, “Permanent life insurance is an asset that many people don’t realize has dual benefits,” says Sweigart. “It’s a way to transfer wealth, there’s an opportunity to grow cash within the policy, and there are lot of great things you can do with it come retirement.”
Finally, many in the LGBTQ community don’t realize coverage is now possible today for those who are HIV positive, and for those who are transgender.
Protecting hard-won gains
Today, LGBTQ people live in a world hard to imagine just a couple of decades ago. Life insurance can help protect hard-won gains and provide living benefits.
“Seek somebody out that you feel comfortable with and you feel is a good fit. Look for an organization that’s financially stable and strong,” says Sweigart. “And shop around for coverage that works for you. There’s a policy that’s right for every situation. If price is a critical question, something is better than nothing.”
Finally, he says, if you’re HIV positive or transgender, “Don’t be discouraged to apply.”
“It’s getting better out there,” says Wernick. “You can’t be fired for being out, so we’re better able to take care of each other and build a life now. People are coming out younger, so they’re partnering younger and having families. So the trends are moving in the right direction, and gay people are seeing that they need life insurance just like any other couple.”
Working with an insurance professional like Tristan or Mindi is a great way to learn more and get coverage.
