Protecting Your Ministry with Key Man Insurance


Key man insurance (also called key person insurance) can be very important to the life and longevity of your ministry. Simply described, key man insurance is a life insurance policy for one or more lead pastors, administrators, etc. A key man policy is owned by the ministry and is meant to help compensate the ministry for the death of one of its “key” leaders. The death benefit can help the church show financial strength to creditors, conduct a proper search for a replacement without worrying about immediate financial needs, and promote a general succession plan.

Ministries should consider a key man policy for the following reasons and circumstances:

  • To insure the life of any employee who has exceptional knowledge of the intricacies of the ministry
  • When the reputation of the church is directly tied to the charisma of the pastor
  • If a bank or lender is requiring a guarantee on their business loan(s)

Most key man policies are simple term life insurance products. We recommend a 10-year term, minimum. However, depending on your leader’s age and health, a longer-term policy may be more desirable.

Furthermore, consider purchasing enough insurance to adequately support:

  • Debt (long and short-term loans)
  • Future income (fund raising, general giving, etc.)
  • Current ministry operations

For more information about the benefits and costs of key man insurance, please call AGFinancial Insurance at 866.621.1787.

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