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Do Pastorial Exemptions from Social Security Hurt My Ability to Obtain Life Insurance?

The impact of opting out of Social Security

Q: I am exempt from social security coverage on the basis of my religious convictions. For many years, I have wondered if my exemption from social security prevents me from obtaining life insurance or participating in an IRA or other retirement program. Can you help? Rev. J. N., Austin, Texas

A: An exemption from social security coverage requires that the applicant be opposed on the basis of religious convictions to the acceptance (with respect to services performed in the exercise of ministry) of benefits under any public insurance system (including the social security program). Income tax regulation 1.1402(e)-2A(2) provides that "the term 'public insurance' … refers to governmental, as distinguished from private, insurance, and does not include insurance carried with a commercial insurance carrier …" Accordingly, you are free to obtain life insurance, or invest in an IRA or most other retirement programs, despite the fact that you are exempt from social security coverage.

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