You’re called to lead as a pastor in your church. You tend to your congregation, engage with the community, and manage your church’s resources, including its insurance. But there is also another, more private, consideration – your family.
Faith that God will always provide is central to Christianity. Yet, God also allows you to use tools to bring about His will. A minister’s life insurance plan is just that: a tool to allow you to protect your family should you be called home.
It provides important financial protection for ministers and their families. It’s a safety net that ensures a family can cover funeral costs, medical bills, and outstanding debts. It also protects your family from financial hardship during an emotionally challenging time.
In this blog, we’ll review life insurance options available to ministers and an overview of each type of plan.
5 Types of Life Insurance for Ministers
In general, you will find 5 types of plans available. Here’s a quick overview of each type of plan.
1. Term Life Insurance
This is one of the most popular types of policies. It provides coverage for a specific amount of time. This is typically 10, 20, or 30 years, and comes with a predetermined death benefit. If you outlive the term, the coverage will expire with no payout.
It is designed to provide financial protection when raising children or paying off a mortgage. It also offers some of the lowest premiums of any stand-alone plans. This is because it only pays out if the policyholder passes away.
Overall, this type of insurance is a straightforward, affordable way to ensure family financial security during potentially vulnerable periods.
2. Whole Life Insurance
This is a type of permanent insurance that provides coverage for your entire lifetime — you just have to keep the premiums paid.
These policies offer a guaranteed death benefit along with fixed premium rates that don’t change with age or health. They also build cash value over time that you can borrow against. The value grows tax-deferred and can be used for financial planning or as an emergency fund.
With whole life insurance serving both for your protection and investment, it can provide financial security for a minister’s family while offering financial flexibility too. However, the largest drawback is cost due to its lifelong coverage and cash value, which you can tap into.
3. Universal Life Insurance
This is another permanent policy that combines a death benefit and an interest-earning savings component. Overall, it works like whole life insurance, but with a few nuances.
The difference comes in your ability to adjust premium payments to accommodate your financial situation. You can also accumulate cash value based on current interest rates. This can be used to pay premiums and borrow against it if you need to.
In the end, universal life plans have greater flexibility than traditional whole-life policies, but you have to manage them to receive the most benefits.
4. Supplemental Life Insurance
These are plans that act as extra coverage. You have to purchase it in addition to your primary life insurance policy. This is often used to increase the benefit over and above what is typically offered through a workplace policy.
These policies feature extra financial protection with lower premiums. Sometimes they don’t even require a medical examination. However, coverage amounts are usually limited.
One thing to note is that these policies are often portable, so you can keep them even if you change employment.
Overall, supplemental life insurance can be an affordable way to enhance your overall protection.
5. Keyman Life Insurance
Keyman life insurance completely differs from the other four types mentioned above, but it's worth explaining. With this, the church could take out a life insurance policy on you. If you passed away, the church would then receive the benefit.
This coverage provides financial stability for the church during the leadership transition. It can also help compensate for the loss of congregants and offerings during an unexpected pastoral leadership change.
Where can a minister find life insurance?
Most churches provide a plan for full-time staff members. It’s a standard part of the benefits and compensation package. But the amount they provide depends on the individual church. It could only be enough to cover funeral expenses or significantly more. It’s a good idea to check your plan to see exactly what is offered.
You may also qualify for a group plan. Many churches are able to join insurance plans together by working with a benefits partner. They generally are tied together by denominations or other similar church governing bodies. Reformed Benefits Association is an example of a benefit partner who works with 100% faith-based organizations.
Insurance companies will also sell plans to individuals. In this case, it's important to shop around to find the best deal. Also, be sure to do your research on company reputations and customer reviews. Every plan will make it easy for you to pay your premiums — but you also want to make sure that the plan you choose is easy to work with should your policy have to be used.
Three Other Options a Minister Could Consider
These three policies are specific to certain situations that you may want to consider. These will almost always be purchased in addition to your primary policy. Here’s a quick overview of each one.
1. Survivorship Life Insurance
This insurance, also known as “second-to-die life insurance,” covers two individuals. It is typically used with spouses and pays out the death benefit only after both have passed away.
Survivorship plans are great for couples looking into legacy planning or protecting their children's financial future.
2. Burial and Funeral Expenses Insurance
This is a specialized type of insurance designed to pay for end-of-life expenses. This protects families from facing significant financial burdens during a time of grief.
Because this plan only covers funeral and related expenses, the coverage amounts are relatively small. But the benefit is that premiums are affordable.
3. Accidental Death and Disability
If you spend a lot of time on the road for your ministry, this is one to consider. It is insurance specifically for death or disability resulting from accidents. This covers you for car crashes, or other sudden, unforeseen events.
You’ll find benefits beyond standard life or disability insurance. They may pay out higher amounts for accidents. In most cases, they also cover rehabilitation, medical expenses, and income replacement.
As with most important financial decisions, finding the right partner to work with is important.
Life Insurance for Ministers Through Group Insurance
With life insurance, you’ll have peace of mind knowing your family is going to be taken care of should you pass away. It’s one less worry to distract you from your primary calling of tending your congregation.
If you’re considering adding it to your benefits plan, Reformed Benefits Association can help. As a benefit provider that works exclusively with 100% faith-based ministries, we’re here to provide insurance for both health and life to ministers and church staff members.
If you would like to know more about our supplemental and traditional plans available, download the 2025 Benefits guide to get started.