Did you know? Amateur athletes with promising professional careers should be protected with specialized disability insurance products. A basic disability policy is insufficient to protect the potential of professional sports income. Specialty disability products with optional riders will provide income protection for the unique circumstances of student athletes.
Protecting the promise of a pro-career
Considerable earning potential is at stake for some college athletes if they are drafted by a professional team. The chance of a lost draft opportunity due to a player injury sometimes tips the decision to leave school before earning a degree in order to declare eligibility for the NFL draft. College football players with a good chance at being drafted can protect their draft potential and their value in the draft. Draft protection pays the player if their draft value decreases due to an injury or illness. The contract will often define a sliding scale that factors the player’s drop in the draft order and the amount of benefit payment.
Of course underwriting is crucial for both the applicant and the insurer, especially when it comes to pre-existing conditions. Just as with the typical disability policy, exclusions and pre-existing conditions will restrict the benefit.
Financing the premium
The annual premium for a specialty disability policy is generally $10,000 for $1 million of coverage. That’s a pretty hefty price tag. Parents or players may secure a loan for the premium. Banks often require a life insurance policy to secure the premium loan. For the financial professional that may result in a second sales. Colleges and universities may use a disability policy to entice players to stay in school by paying the premium. The player receives the benefits if injured, reducing the risk of forfeiting future earnings if injured before begin eligible for the draft.
Benefit period and optional coverage
Coverage for professional and student athletes is usually for a single season. The benefit is paid if the athlete is injured and cannot return to the sport full-time. The contract language defines exactly how many games a player can play and still be eligible for at least a partial benefit.
Other features can be added to the policy if an injury or illness leads to the loss of endorsements. Benefits can be structured to cover the cost of an agent or manager, or if a contract offered is not finalized.
College athletes could be a new market opportunity for the advisor with connections to players, their families, or college athletic programs. Talk to DIS about disability insurance for college or professional athletes. We will work with our carriers to find the right amount of coverage and optional benefits for your client. If you have a relationship with a student athlete who would benefit from disability insurance, you may find our co-selling arrangement an attractive option.