For Pride Month 2022, the Bestow team surveyed more than 500 LGBTQ+ individuals to understand their unique financial planning concerns and how they could translate into actionable insights for the life insurance industry.
Members of the LGBTQ+ community have many of the same financial goals as heterosexual and cisgender folks but often experience higher barriers to achieving them. In fact, more than a third (35%) of LGBTQ+ folks surveyed by Bestow have experienced discrimination or microaggressions by a financial services institution based on their sexual orientation or gender identity. And as a result, one-third of respondents prefer to work with LGBTQ+-identifying financial or healthcare professionals.
The LGBTQ+ respondents we surveyed are experiencing or embarking on major life milestones, such as getting married or buying a home, which often creates a need for life insurance coverage. But, similar to other groups underserved by the financial services industry, such as the Black community, LGBTQ+ individuals are underinsured.
“As an industry, we should care about prioritizing access and representation to better serve those who need our services, such as the LGBTQ+ community. In many cases, life insurance can help protect this community’s hard-won gains,” said Jeremy Bill, Chief Insurance Officer at Bestow. “This data helps inform potential enhancements to Bestow’s life insurance platform. We encourage the entire industry, including every life insurance company, agents, and regulators, to work together and ensure more inclusivity and access.”
The LGBTQ+ community values life insurance.
- More than half (56%) of LGBTQ+ folks surveyed have life insurance.
- Of those with life insurance coverage, 52% have an employer-sponsored life insurance policy, which helps explain the gap in coverage most respondents had.
- Nearly 80% of respondents consider themselves somewhat or very knowledgeable about life insurance.
- When asked where they learned about life insurance, 40% said it was through work.
- While dependents might look different than heterosexual or cisgender folks’, the LGBTQ+ community is protecting the people they love with life insurance. For example, nearly 25% of LGBTQ+ respondents list a parent as their primary beneficiary, compared to just 8% of Bestow customers.
At the same time, the LGBTQ+ community is underinsured.
- LGBTQ+ individuals with life insurance have an average of $90,000 in coverage, just 1.7x the average salary reported (~$53,000).
- Most people with financial dependents need a life insurance policy between 5 to 10 times their annual salary
- 70% of those surveyed support someone other than themselves financially, including a partner, child, or other loved ones.
- Of those with financial dependents, just 64% have life insurance.
The cost of healthcare is a primary financial concern for LGBTQ+.
- Nearly 80% of LGBTQ+ respondents report feeling concerned about medical costs.
- In particular, medical costs associated with mental health (57%), preventative medicine, and treatment and medications for chronic illnesses.
- A study published in the National Library of Medicine found that LGBTQ+ people used mental health services at 2.5 times higher rates than heterosexual and cisgender individuals. Studies have also found that they are two and a half times more likely to experience depression, anxiety, and substance abuse, all considered in policy eligibility and pricing.
- 25% of respondents with a partner are financially concerned about the cost of family planning, including adoption, fertility treatments, IVF, surrogacy, or sperm donation.
- The average cost per IVF cycle, including medications for egg donors and surrogates, is approximately $20,000. To secure an egg donor is, on average, $10,000 – $20,000 in compensation and fees.
“As an industry, we must find better ways to evaluate the risk of mental health concerns holistically,” said Jeremy Bill, Chief Insurance Officer, Bestow. “There are so many factors to consider in well-being, and we should consider how we can dig deeper into treatment, recognize consistency in medication or therapy, and acknowledge support systems to expand access to coverage.”
LGBTQ+ individuals experience the same milestones as their heterosexual and cisgender peers, which creates a life insurance need.
- 42% of those who don’t currently have life insurance plan to take out a policy when they buy a home, form a partnership, or get married, or start a family.
- In the next ten years, nearly one-third of respondents plan to buy a home.
- Younger LGBTQ+ homeowners were more likely than older LGBTQ+ homeowners to have a life insurance policy.
- About 80% of LGBTQ+ homeowners under 30 had life insurance.
- 24% of LGBTQ+ respondents that do not have life insurance said they are currently paying a mortgage.
Regardless of whether they have dependents, most LGBTQ+ respondents (63%) still prioritize end-of-life financial products like life insurance, a will, or long-term care insurance.
- 61% of LGBTQ+ respondents under 40 reported they had at least some end-of-life financial plans in place, including a term life insurance policy (40%), a living will (29%), or long-term care insurance (15%).
“The industry has an opportunity to address this community’s health-related financial concerns with thoughtful consideration of eligibility and access in policy design. Companies could look to add living benefits for mental health and family planning or offer strategic partnerships with healthcare providers to offer services at no-cost. Whatever the method, the industry has an opportunity to meet the unique needs of the LGBTQ+ community and be even more inclusive,” said Jeremy Bill, Chief Insurance Officer, Bestow.
So, how do we move forward? At Bestow, we believe leveraging these insights means moving into action: encouraging representation in financial planning services, practicing inclusive hiring, eliminating health disparities, and elevating the voices of all people ultimately results in building better, more inclusive products and services.
Bestow commissioned a third-party company to conduct an online survey of 526 individuals aged 18-56 in the United States who identify as members of the LGBTQA+ community between May 5-6, 2022.
For this study, we define generations Generation Z as ages 18-25 and Millennials as ages 26-40.
Bestow is a leading life insurance technology company. As both a direct-to-consumer destination and an infrastructure provider, Bestow powers instant life insurance solutions for businesses of all sizes, across any channel. In a world full of unknowns, Bestow is on a mission to make life insurance accessible to millions of underserved families by creating the best possible products and experiences that serve future generations.