Today we are going to talk about insurance, which is a favorite topic of conversation for almost no one. In fact, on a recent road trip, my mom wanted to take a quick nap so I listened to a podcast about insurance to help put her to sleep. I’m sure many of you can relate.

Even though insurance isn’t a very exciting topic, it’s an important one. Especially disability insurance, which is what we are talking about today. If you own your home, you likely have homeowners insurance because your mortgage provider requires it and it’s just smart. If you have a car, you surely have it insured, because state law requires it. You’re probably on top of health insurance, even if you are using a medical sharing ministry. Disability insurance, however, is easy to overlook. It isn’t required by law and the people around you aren’t using it on a daily basis. But it’s very important.

The Purpose Of Disability Insurance

What does disability insurance do? It replaces some of your income if you become disabled and can’t work. It helps keep the lights on and some food on the table if you can’t support your family due to a disability. Insurance never replaces ALL of your income, because then you’d have no motivation to recover, but it makes a big difference in your family’s ability to weather a disability. 

Does a pastor need disability insurance? It isn’t exactly a dangerous job like a test pilot or deep-sea fisherman. What are the chances that you’re going to get hurt so badly pastoring that you won’t be able to work? Pretty slim.

Common Causes Of Disabilities

Disability isn’t just about accidents, though. It is about sickness and mental health issues, too. In that light, pastors may be at even more risk than test pilots and deep-sea fishermen. A 2016 study found that the top 5 reasons for short-term disability claims are:

1. Pregnancy
2. Musculoskeletal disorders affecting the back and spine, knees, hips, shoulders, and other parts of the body
3. Digestive disorders, such as hernias and gastritis
4. Mental health issues including depression and anxiety
5. Injuries such as fractures, sprains, and strains of muscles and ligaments
   
   

The most common reasons for long-term disability claims are:

1. Musculoskeletal disorders
2. Cancer
3. Pregnancy
4. Mental health issues 
5. Injuries (as described above)
   
   

As you can see, pastors face the same risks for most of these disabilities (except pregnancy for males, of course) as people in more physically dangerous occupations. And the risks are real.

Your Chances Of Becoming Disabled

What are your chances of becoming disabled? Greater than you think. The Social Security Administration did a study in 2017 that found that today’s 25-year-olds are more than 4 times as likely to become disabled for at least a year before retirement age (27.2%) than to die without a disability before retirement age (5.9%). For a 54-year-old, the chances are a little higher but the ratio is about the same. And yet everyone talks about life insurance instead of disability insurance. 

On average, 5.6% of working Americans will experience a short-term disability of six months or less every year. Most of these disabilities are due to illness, injury, or pregnancy and almost none of these are job-related. Are you convinced of the importance yet? Remember, a 25-year-old has a 27% chance of becoming disabled. That’s more than one out of every four people.

Short-Term Disability Insurance

As I’ve hurled statistics at you, you’ve probably noticed the term “short-term” and “long-term” stuck in front of “disability” from time to time. Any disability that lasts 6 months or less is considered short-term and anything longer is considered long-term. Accordingly, there are insurance policies issued for short-term disabilities and long-term disabilities.

Since I’ve endeavored to impress upon you the risks of disability, you’ll probably be surprised when I say you may not need to own short-term disability insurance. Because of the short-term nature of these disabilities, you may be able to self-insure against them. What does that mean? You can afford a disability without insurance.

I have a 6-month emergency fund, so I would not personally buy short-term disability insurance. If I am disabled for less than 6 months, I have cash in the bank to cover all of my expenses. If I didn’t have that emergency fund, though, it would be wise for me to have short-term disability insurance. 

Long-Term Disability Insurance 

My emergency fund will only last 6 months, so it’s important for me to have long-term disability insurance. I could cover a 3-month sickness, but not a 3-year battle with cancer. That could bankrupt me. 

In fact, studies have found that the leading cause of bankruptcy is medical bills and cancer patients are 2.65 times more likely to file bankruptcy than those without cancer. So, unless you are independently wealthy or have a spouse who can fully support your family financially, you need to look into long-term disability insurance. 

Why Disability Insurance Is Especially Important For Pastors

Social Security provides disability benefits, though the majority of applications are denied. If you are approved for benefits, they aren’t very much. In fact, the average monthly Social Security disability payment is just below the poverty line. For one person. It gets farther and farther below the poverty line the bigger your family is. 

Even though Social Security disability benefits aren’t impressive, they are at least something. It’s nice to have that to fall back on if you aren’t insured. Unless, of course, you’re a pastor who opted out of Social Security. Then you have nothing to fall back on. Ouch. 

Therefore, even if you’re just a pastor who doesn’t do anything dangerous, you need to look into disability insurance. And if you opted out of Social Security, then you REALLY need to look into disability insurance.