Gender agnostic/neutral character model
Not only have a Male and Female character - but add a Gender Neutral character model too.
1: Have the Male Model with the beard - and obviously masculine physique.
2: Have a gender agnostic/neutral model with no beard and no specifically male or female facial characteristics; and a fairly plain physique that cannot be identified as specifically male or female - think android, tall teenager or robot.
3: And As Phoenix84 suggested, Have a Female Model with recognisably female characteristics and general physique.
4: Optionally have a "build" slider that can increase or decrease the apparent visual physical weight and girth of the player model.
This allows for reasonable equality for all players and political correct perceptions of body image.
Those playing specifically as a male can use the male model, those specifically playing as a female can use the female model, and those wanting privacy with reguard to their gender identification can use the "neutral" model which doesnt reveal anything either way.