“The highest paid player on an NFL team is the quarterback and the second highest paid player is the left tackle because the left tackle’s job is to protect the quarterback from what he can’t see coming”
The is the opening monologue from the film “The Blind Side”.
A study by the University of Colorado performed in 2007 said that the career of a pro football player is about 3.5 years. Baseball players are slightly better at 5.6 years. An athlete may have to quit, when, for example, in the case of Joe Theismann, a 250 pound line backer falls on his leg. Did he have High Limit Disability Insurance?
What does a player do when he cannot play in games anymore but he has acquired a life of luxury due to his high income? Unfortunately many athletes listen to bad advice and make bad investments. A report in Sports Illustrated stated that 70% of all professional athletes are either broke or have hit hard times within 5 years of ending their playing days.
Professional athletes often need High Disability insurance for:
- Personal Disability
- Contract Guarantee
- Team Indemnification
- Loss of Endorsement
Here are some examples:
“A client is rated based on the type of motor sport, class and medical history” says Adam Bates, vice president of Insurance Services of America, which offers niche insurance including health coverage for amateur and professional racers. “I usually recommend an Accidental Death and Dismemberment Policy, as most life policies exclude racing”.
Laura Hauenstein, president of WSIB Motorsports Insurance, which insures racers, says some of the agents familiar with motor sports will use the Internet to research the driver. If they find they have a history of crashing, rates can be higher.
Benefits are paid on a per race missed basis and/or weekly or monthly basis for a driver who due to illness or bodily injury is unable to drive in a race.
Temporary Disability benefits for periods up to 60 months. Permanent Disability benefits are paid in a lump sum to compensate for future loss of income.
This is an intense contact sport requiring optimum physical health. A player’s ability to perform could be jeopardised due to either overuse or trauma, such as: muscle strain and meniscus tears; hand and wrist injuries; tendinitis, especially of the elbow; rotator cuff tears; “dead arm” and ulnar collateral ligament tears. In these scenarios, the athletes need High Limit Disability Insurance.
A Disability Insurance Plan for Professional Baseball Players can provide monthly benefits from $1,000 to $100,000 or higher and offer lump sum benefits of $50,000,000 or more.
Injuries in other sports: offering similar benefits for disability:
- ankle sprains, ligament tears and breaks;
- knee and foot injuries;
- muscular tears, sprains and breaks;
- jammed fingers;
- stress fractures;
- deep thigh bruising.
- knee injuries including ACL damage
- concussion and other head injuries;
- sprains, tears, broken bones, especially to the legs
- shoulder and elbow injuries;
- wrist fractures;
- lower back injuries;
- injuries to the hip
- ankle sprains;
- achilles tendonitis;
- iliotibial band syndrome;
- muscle cramps;
- delayed-onset muscle soreness;
- patellofemoral pain syndrome
- plantar fasciitis
- shin splints
- calf, hamstring and groin muscle pulls and strains.
These plans are used in a number of ways to insure the professional athlete personally or to insure the team of which the athlete is a member as to the financial losses that result from a disabling accidental bodily injury or sickness. Career length varies by the sport in which the athlete performs. Exceptionally high earnings are generated in a short time span making the adequate insuring of the earning potential a primary financial planning process.
Here are some of the uses of those plans:
1. Loss of Future Earnings
A professional athlete can anticipate income levels and probable playing time. A disability can affect the level of income to be earned in the future and a disability can shorten the career period. As an example, an athlete has no income assurance beyond the term period of the present contract. This plan can insure an income should disability shorten the expected career period.
2. Contract Completion
The loss of an athlete by disability puts the team in double jeopardy. Revenue may slip and the team must continue to pay the non-performing athlete. These plans can insure the contracted compensation to the athlete, thus relieving the team of the financial burden.
3. Loss of Endorsements
Endorsement income and fees continue to flow as long as the public remain fans of the athlete. A political statement, a drug involvement, a drunk arrest, a public relations blemish, and the advertiser/endorsers pull back from sponsorship. This loss is also insurable.
4. Cost of Agents/Managers
During periods of disability it is in the athlete’s best interest to continue the use of agents and managers to keep the athlete’s value as an athlete and as a product spokesperson keenly in the minds of those who contract for their services. These costs can be insured.