Life insurance companies are generally not allowed to discriminate based on protected characteristics like race, gender, religion, or national origin. However, there are some limited circumstances where they may legally differentiate pricing and coverage.
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When Discrimination is Prohibited
The Civil Rights Act of 1964 and other federal laws prohibit insurers from discriminating on the basis of:
- Race or color
- Religion or creed
- National origin
- Sex or gender
- Disability
Insurers cannot refuse coverage, cancel policies, or charge higher premiums to individuals based solely on these protected classes.
Allowable Risk Factors
While overt discrimination is banned, life insurers are allowed to assess risk and set premiums based on actuarial data related to factors such as:
- Age
- Health status and medical history
- Family medical history
- Occupation
- Lifestyle and hobbies (e.g. smoking, skydiving)
- Credit history
- Driving record
Insurers argue these are legitimate risk factors that statistically correlate with life expectancy. Critics contend some of these factors can be proxies for discrimination.
State Laws and Regulations
In addition to federal civil rights laws, states have their own insurance regulations which may further restrict allowable rating and underwriting factors. A few states have banned the use of credit scores or certain other risk factors for setting life insurance rates.
Disability and Genetic Information
The Americans with Disabilities Act (ADA) prohibits insurers from discriminating based solely on an applicant's disability. However, they can still consider an individual's health status and ability to perform basic daily living activities.
The Genetic Information Nondiscrimination Act (GINA) bars insurers from using genetic information in underwriting, with the exception of tests for the BRCA1 and BRCA2 genes related to breast and ovarian cancer.
What if You Suspect Discrimination?
If you believe a life insurance company has unlawfully discriminated against you, you can file a complaint with your state's insurance department and/or the U.S. Department of Justice's Civil Rights Division. An attorney specializing in insurance law or civil rights may also be able to advise you on your rights and legal options.