How to Buy Disability Insurance as a Church Employee

One in four people who are currently in their 20s will become disabled before retirement.¹ It can be hard to imagine this many people experiencing some disability. How does this happen? Common causes include cancer, heart attack, diabetes, back pain and arthritis.² After considering how often disability can strike, you can take proactive steps to help guard you and your family from loss of income with disability insurance.

Disability insurance replaces a portion of your income during a disability. What should you look for when purchasing a policy? How do you know you’ll be protected? Below are answers to the commonly asked questions about how to buy disability insurance.

What are two basic ways to buy disability insurance?

1. Through your employer. Group disability insurance through your employer is typically less expensive than buying a private plan. Some employers cover all or a portion of the cost.

2. On your own. Private disability insurance is typically based on what you do for a living more than your health or age. Buying your own policy includes two benefits:

Portable coverage: Unlike a group plan, if you change ministries, you can take your private disability plan with you — and eliminate a coverage gap.
Tax-free benefits: If you paid for your disability insurance with after-tax dollars, the benefits you receive if you become disabled will be tax-free.

What’s the difference between short- and long-term disability insurance, and do I have to buy them separately?

Short-term disability: When you are limited from performing the material and substantial duties of your regular occupation due to sickness or injury, short-term disability supplements your compensation for a limited time. To qualify, the medical condition must occur off the job and prevent you from being able to perform your job responsibilities. When the policy’s benefits period ends, payments end even if you’re still unable to work.

Long-term disability: Suppose you’re still disabled after a time typically covered by a short-term disability policy. In that case, long-term disability can kick in to pay a portion of your income for longer. Depending on the policy terms, coverage could last for a few years — through retirement age or until you’re no longer disabled.

Short- and long-term policies are separate and must be purchased individually. You do not have to purchase short-term disability insurance to get a long-term insurance policy.

How does disability insurance work, and what should I look for in a policy?

When evaluating how to buy disability insurance, it’s essential to understand how a policy works based on the policy type and the plan details. Consider the following factors when making your selection.

Own occupation vs. any occupation policies: In an “own occupation” policy, you are considered disabled if you cannot perform the duties of your current occupation due to a covered injury or illness. On the other hand, an “any occupation” policy will require you to find another job, possibly in another industry, that you can perform and will only consider you disabled if you can’t work at all.

Elimination period — the waiting period for a disability insurance policy: The elimination period is the time between your doctor declaring you disabled and your first benefit payment. This time period is based on the coverage designated in your plan. Think of your medical plan’s deductible and rate — the higher the deductible, typically the lower the rate. With disability insurance, the longer the waiting period for your disability benefit, the lower your rate will typically be.

Salary increase: Find a policy that will accept increases in your salary. Some policies will freeze your income level when you purchase the plan and never accept a higher level (which would mean a larger payout should you become disabled after a salary increase). Report increases in your salary promptly to ensure you receive appropriate benefits.

Extra benefits: Some disability policies may offer extra benefits. For example, GuideStone® offers:

Survivor benefits: If you die after receiving benefits for 180 or more consecutive days, your survivor receives a lump sum payment of three times your last month’s gross disability benefit.
Rehabilitation and Return to Work Program: To encourage individuals to return to work as soon as they become physically able, individuals receive an additional benefit for participating in a rehabilitation program.

Fortify Your Steps by Protecting Your Income

At GuideStone, we are here to guide you along your journey to a strong financial future, fortifying your steps as you follow God wherever he leads. Not sure how much disability coverage is best? Use our disability insurance calculator to estimate how much you might need. Keep in mind that disability insurance pays a percentage of income — it’s not a full replacement of your salary. Plus, learn more about other insurance products that can help protect your family.

As you have questions about how to buy disability insurance as a church employee, we’re here to answer them. Contact us at Insurance@GuideStone.org or 1-844-INS-GUIDE, Monday through Friday, from 7 a.m. to 6 p.m. CT.

GuideStone® welcomes the opportunity to share this general information. However, this article is not intended to be relied upon as legal advice.

¹disabilitycanhappen.org/overview

²disabilitycanhappen.org/common-causes