Does Gender Affect Structured Settlement Annuity Pricing?
An Introduction to Structured Settlement Pricing Issues
Q. Why do females receive less lifetime monthly income from a structured annuity than males of the same age and health status, when the structured settlement is funded with the same amount of money?
A.
1. As an initial matter, there is no difference in pricing except where life contingent payments are being priced. For example, if there is a need to fund payments of $8,000 per month for a fixed period of 20 years it will cost the same whether your gender assigned at birth is male or female, or you now identify as a one of the non binary genders on the spectrum and have legally changed your gender.
"With respect to the pricing differential on life contingent benefits, there is plenty of research that shows that that biological males have short lives than biological females. We concluded that men live shorter lives than women at present. Women have more functioning problems now at least partly because they are not as strong, mobile, or steady as men. Currently, men have more lethal conditions, whereas women have more disabling chronic conditions". Source : Eileen M Crimmins, Hyunju Shim, Yuan S Zhang, Jung Ki Kim, Differences between Men and Women in Mortality and the Health Dimensions of the Morbidity Process, Clinical Chemistry, Volume 65, Issue 1, 1 January 2019, Pages 135–145.
Women live longer than men even during severe famines and epidemics | PNAS PROCEEDINGS OF THE NATIONAL ACADEMY OF SCIENCES Vol. 115 | No. 4 January 23, 2018
Structured settlement annuities are issued by life insurance companies. Since the period over which biological females (with no other underwriting risk factors) are "insured" is statistically longer than biological males, it follows that the cost of $1,000 per month of "income insurance" for life is higher. Consequently the income per each dollar of funding is less. The reverse happens with other financial protection products, such as life insurance, where the cost of insurance is less because a biological female has a statistically lower mortality risk.
Insurance pricing for lifetime payments is data driven and gender is not the exclusive element in pricing. For example, a lifetime annuity payment stream for a female with health impairments will be less costly than a female without health impairments, and may even be less costly than a male without health impairments depending on the leval of impairment,
Please note that most of the time, people who opt for lifetime income have a certain period. What that means is that is certain number of payments will be paid whether or not they survice the entire payment schedule, so they can leave something to a beneficiary or beneficiaries. For example, if you go for a $5,000 per month for life with 40 years certain, it means that payments will be made for 40 years (480 monthly payments) and after that point on, payments will only be made if you're still living at the time a scheduled payment is due, however long that is.
Q. What Role Does Gender Identity Play in Structured Settlement Annuity Pricing, where Gender Identity is Different from Birth Gender? #LGBTQI2A+
A . As of when we last surveyed life insurers that issue structured settlement annuities (2023), there is a binary pricing standard for lifetime structured settlement annuity payments, based on gender at birth, although the procedures continue to evolve and may vary by company and product line.
While there are public statistics such as "More than 40% of transgender adults in the US have attempted suicide" - Williams Institute UCLA Law July 20, 2023", the statistic has not been sufficient impetus for life insurers that issue structured settlement annuities, to establish a new underwriting category for trans people considering lifetime benefits on structured settlements.
Two US states (Massachusetts and Montana) have had so-called "unisex" pricing of life contingent benefits (gender neutral pricing), but only where the structured settlement annuity is owned by an entity in those states. It's important to know that gender is only one of the factors in structured settlement annuity pricing for lifetime benefits.
- See HB 379 HB0379.pdf (mt.gov)
- See Copy of 2022 Complaint
B. A plaintiff's medical information may help increase the payout of life contingent payments or other options insuring a lifetime of payments, as it would for anyone else. For example, the use of Hormone Replacement Therapy in transition has known side effects. and could be a factor in an increased rated age which would reduce the cost of lifetime structured settlement annuity payments, thereby increasing the amount of structured settlement payments for each claim dollar allocated to a structured settlement.
One carrier I spoke with April 10, 2023, indicated its present position in structured settlement quoting is to use the legal gender, substantiated by a government issued identification [ note answer to next question], but to underwrite any medical based on the gender assigned at birth
I'd like to re-emphasize that structured settlement pricing for guaranteed lump sum payments and period certain payments, which are paid whether or not the Payee survives the entire payment schedule is unaffected by gender. Feel free to contact us if you would like to learn more.
Q. "Sandy", age 26, a trans female, receives lifetime payments from structured settlement established from the settlement of a wrongful death lawsuit when she was 7 years old, well before her transition. Will Sandy's payments be adjusted downward based on the gender Sandy now identifies with?
A. No. Lifetime structured settlement payments from an existing structured settlement will not be increased if a person later transitions from female to male, after the structured settlement annuity contract has been issued. For the same reason, lifetime structured settlements will not be decreased if an annuitant socially or medically transitions from male to female.
One of the structured settlement annuity issuers that responded to this question stated that the only possible exception would be a rare instance where the structured settlement annuity contract was issued incorrectly in the first place.
Q. How are issuers of structured settlement annuities handling gender identity on applications and on policies?
In all 50 states, transgender individuals can legally change their gender on their driver’s license. But the process can be challenging. Some states require a birth certificate amendment and/or proof of gender-affirming surgery. Other states require a letter from a physician confirming that the individual is or has undergone hormone therapy. However, Washington, D.C., and at least 22 states do not require provider certification to change the gender on your driver’s license. Connecticut is one of those states as is California.
Since January 2020, Connecticut residents have been able to self-identify their gender designation on a the CT DMV Gender Designation form and pay a $30 fee to complete the process outside of a renewal period. The policy change also applies to learner’s permits for new drivers. If the person requesting the change is a minor, a parent or guardian must be present and sign the B-385 form, or the minor must submit a signed and notarized form with the B-385
What is the Social Security Death Master?
All annuity applications require a Social Security Number. The Social Security Number enables a structured settlement annuity issuer to know when you're dead through the "Darth Vader" sounding "Social Security Death Master". When a death certificate is filed it includes your Social Security Number and the Social Security Administration is where one of the copies goes.
Insurance companies and banks regularly sweep the Social Security Death Master for business purposes. If you have transitioned, make sure the Social Security Number jives with your new name.
Please check back at the page as we intend to update this post with new developments as they arise and we become aware of them.
Last updated March 22, 2025
#LGBTQI2A+ #genderandstructuredsettlements
