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Can a third gender open a bank account, buy an insurance policy, invest? Not easy, even 3 years after SC’s order

While some financial services record the third gender, benefits don't come by easily. Insurance policies count third gender as 'male' and calculate premiums. Absence of marital status also mean that add-on credit cards cannot be given to partners.

September 12, 2021 / 02:57 PM IST
Representative Image (Image: Reuters)

Representative Image (Image: Reuters)

In July, as part of the pride month celebrations, Moneycontrol had explored the challenges faced by the lesbian, gay, bisexual, transgender, queer, intersex and asexual (LGBTQIA+) community in India while investing in financial products.

September 6 marked the third anniversary of the path-breaking Supreme Court ruling that decriminalised homosexuality in India. While the legal path is clear for people of the LGBTQIA+ community in India, it’s not that easy to claim financial benefits, if you identify yourself as the third gender.


A Permanent Account Number (PAN) is needed for getting a host of benefits: opening a bank account, buying an insurance policy and so on. Fortunately, the PAN application form allows you to identify as a third gender person. “The PAN application form provides for the selection of ‘transgender’ as the third gender in addition to male and female,” says Homi Mistry, Partner, Deloitte Haskins & Sells.

If you wish to change your gender later, it is possible without any documentary proof of gender identity as per the Director General of Income Tax (Systems).


Bank Account

Banks recognise only two genders: male and female. Although some foreign banks capture details such aw the third gender, they still identify you as either male or female.

Also, if you want to apply for change in name, apart from change in sex, then the bank would ask for an official document such as a Gazette notification. Here as well, you can only change your sex from male to female or vice versa.

ICICI Bank declined to comment on whether same-sex partners could open joint accounts.  Axis Bank, Indian Bank and Standard Chartered Bank accept 'Mx' as a salutation.

Axis Bank announced on Monday that it would allow same-sex partners to open joint bank accounts and also nominate each other.

Credit and debit Cards

Credit and debit card application forms allow you to state the third gender.

However, since same-sex marriages are not yet legalised in India, the marital status can only be married, single or widow-widower, barring select forms that have the option of ‘others’. You cannot give an add-on card to your partner, as credit cards don’t recognise ‘partners’. Such cards can only be issued to spouse, parent, sibling and child.

Mutual Funds

To invest in mutual funds, completing the Know Your Customer application is the first step. The form offers the facility to opt for the third gender. The name and other details are captured as per the PAN.

When it comes to marital status, too, the option of ‘others’ is explicitly offered. Mutual Funds permit nomination for up to three individuals per folio. The relationship with the investor needs to be mentioned. But unlike in the case of life insurance, these nominees aren’t “beneficial” nominees and do not own the right to the funds. They are only the trustees of the money for the legal heirs.

Life insurance

Several life insurance forms give the option of mentioning the third gender. “Our proposal forms provide an option for the third gender or transgender life assured,” says an appointed actuary at a leading private life insurance company.

While appointing a nominee in life insurance policies, make sure you know who you are nominating and why. “Anyone can be named the nominee to a life insurance policy and the insurer’s responsibility is to pay out the proceeds to them. Ultimately, the legal heirs can stake their claim over the proceeds,” an appointed actuary explains.

In 2015, the insurance regulator introduced a new concept called ‘beneficiary nominee.’ Here, you can nominate your spouse, parents or children and the money goes to them. This nomination overrides your Will. Unfortunately, you cannot nomination of LGBTQ partners isn’t allowed. “This definition leaves out same-sex, unmarried couples,” says the actuary quoted above.

Health insurance

Hardly any health insurance application forms mention the option of the third gender. In most cases, the salutation Mr or Ms. But the health insurance landscape seems to be changing, with some baby steps being taken by international insurance companies operating in India.

Sajja Praveen Chowdary, Head-Term Insurance,, says that a few insurers such as Niva Bupa have provide the option to choose the ‘Third-gender’ in the proposal form.” However, he adds that while the gender under the policy remains ‘Third Gender’, the premiums of the policy will be decided considering the proposer as a male.


The name and gender as mentioned in the PAN are accepted for demat account opening. Among the 10 leading brokers whose forms Moneycontrol checked, only male and female genders were given as options. The forms didn’t ask for the third gender or any different salutation apart from Ms and Mr.

You can nominate anyone and there is no need to state the relationship, as the ‘if any’ mark is mentioned. Up to three nominations can be made for one demat account and the respective proportions can be mentioned. Remember, nomination in demat accounts merely gives the rights as trustees to the nominees. They do not become the ultimate owners of the shares. That shall be decided as per a Will, if there is one.

Recently, regulator SEBI also permitted the option of “Do not wish to nominate.” This can be ideal if you want to transmit the wealth based on the Will.

Employment leave benefits

When you work in large corporate houses, the leave application rules are altered in sync with the exclusivity phenomenon. For instance, the forms for leave application at Star India allow all existing employee benefits around maternity and paternity, in-vitro fertilisation, surrogacy and adoption for LGBT+ employees.

But there is a long way to go as per a Willis Towers Watson’s Emerging Trends in Health Care Survey, “Over 90 percent of the employers provide paid bereavement leave for the death of a spouse, child, parent, grandparent or sibling. Just over three-quarters offer this benefit for the death of same-sex (77 percent) and opposite-sex (76 percent) domestic partners.”
Khyati Dharamsi
first published: Sep 7, 2021 09:19 am

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