Pastors need life insurance to protect both their church family as well as their immediate family. Many small congregations do not offer key person life insurance or personal life insurance for pastors within their standard benefit package.

Therefore, these two different needs are usually addressed by purchasing two policies simultaneously in the individual marketplace.

We would like to discuss planning strategies to protect your church with pastor key person life insurance along with personal life insurance protection.

How a Key Person Life Insurance Helps a Church

What is key man life insurance? Key man insurance is also referred to as key person life insurance, and is a policy that provides the capital needed to allow the surviving members to keep the church running by paying employees and making loan payments.

Most church members would be devastated if a pastor should suddenly pass away. The church would also be adversely affected by lower attendance and smaller donations.

Here are few common problems which can easily be solved by the having the church purchase a key person life insurance policy.

Successor Pastor

Finding an adequate replacement for a dynamic minister who suddenly dies takes a great deal of time and effort.

Key person life insurance coverage allows time for the church to conduct a proper search for the pastor’s successor.

Day to Day church Operations

Key person life insurance is simply a life insurance policy on the pastor naming the church as a beneficiary.

Death benefits provided by this type of policy provide money to allow the church to survive not only the tragic loss of a beloved pastor but fund church operations until they could rebound from the less attendance and lost giving.

The premiums are paid by the church, and if the minister dies the church becomes the recipient of the death benefits.

Loan Protection for the church



Banks feel more comfortable making or renewing your loan when a collateral assignment is in place on a key man life insurance policy.

For example, a church is adding a new location, and is borrowing $3 million to finance the project.

The bank providing the financing may require the church to secure $3 million key person policy as collateral assurance to protect the loan.

The key person policy is purchased by church on the life of the pastor.

Can we name the church as beneficiary of the life insurance policy?

Yes, the premium payer, the owner, and beneficiary of the life insurance policy will normally be the church.

How Much Key Person Life does our Pastor Require?

The amount of coverage needed when applying for key person life insurance depends on both the church’s ongoing annual income of the and amount of outstanding debt.

Another factor to consider is whether there are any outstanding church loans to pastors within the congregation.

Remember, it can take many years to financially recover from the loss of a dynamic minister. So, coverage is often purchased based on a percentage of the church’s current annual income and debt load.

Insurance companies publish key person life insurance guidelines and typically allow a death benefit of 70% of income and debt.

Get Rates for Key Man Pastor Life insurance

You can evaluate both term life insurance and permanent life insurance quotes for your minister using our quote engine.