Clergy Can Rest Easy With Covenant Life

In the beginning, it was called the Fund for Pious Uses, and it played a key role in the founding of the United States.

Now, billed as the world’s oldest life insurance company and known as Covenant Life Insurance, the vast majority of its policyholders are members of the clergy.

“Few outside the religious profession have ever heard of our company or realized that (it) was started by a religious group in America,” said Covenant Life President Robert W. Kloss, 42.

“When the company began in 1717, it was organized by the Presbyterian Synod of Philadelphia to provide for the widows and children of Presbyterian ministers killed when they went out into the wilderness preaching the Gospel to Indians,” he explained.

In 1759, the company became the first chartered corporation in the American Colonies. Today, with $471 million in assets and more than $2 billion of life insurance in force, Covenant is the nation’s 45th-largest mutual life insurance firm.

Covenant now sells policies to the clergy of all Protestant churches, not just Presbyterians, and in recent years has extended coverage to priests, rabbis, elders, deacons, seminarians and choir directors, among others. As a result, its name was changed to Covenant from Presbyterian Ministers’ Fund to better reflect the diversity of its policyholders.

Of its total of 100,000 policyholders with religious affiliations, 80,000 are clergy. Baptists are the denomination with the largest number of insured.

“That’s because there are more Baptists in America than any other Protestant group,” said Kloss, who is Roman Catholic.

Many of Covenant’s sales personnel are former ministers or church officers. For example, James Hall, 59, the firm’s Los Angeles County representative with offices in Santa Monica, was a Baptist minister for 15 years before becoming a salesman. California is the company’s No. 2 state in terms of number of policyholders with 5,200.

Similarly, Ron Hankle, 61, the Orange County representative, has been an elder in the Presbyterian Church for 30 years.

“Pastors feel comfortable with someone like myself who has a strong religious affiliation,” Hankle said. “I understand their needs. They understand the value of life insurance because one of the main things they do is perform funerals.”

Kloss, who has been president of Covenant since 1985, said:

“Financially, we have a very solid, conservative portfolio. We receive a good yield for policy owners.”

He added that for nearly a century, the company has had an A+ rating, the highest given by the leading independent analyst in the insurance industry.

“We invest in companies we believe to be in the best interest of society,” Kloss explained. “We will not knowingly invest in companies that deal primarily in products and services contributing to human weaknesses, the destruction of the environment or whose policies display a substantial disregard for standards of justice and decency.”

The company displayed its financial shrewdness early on when it loaned half its entire assets--5,000--to the Continental Congress to help finance the Revolutionary War. It also played a key role in helping to start the U.S. Mint; five of the mint’s first eight directors were officials of the firm.

Irish-born Francis Alison, a Presbyterian minister, classical scholar and founder of the University of Delaware, served as the firm’s first secretary for 20 years and was the prime mover to incorporate the company. Covenant’s eight-story headquarters on Rittenhouse Square in Philadelphia is named in his honor.

Alison also is remembered as the first American life insurance policyholder. When he died, his family received $1,213.35 from his policy. He had paid $336 into it.