An ‘umbrella’ can provide coverage for potential draftees. Jack Bechta
As draft prospects prepare for the NFL Combine, attend all-star games and focus on their workouts, one item that sometimes slips through the cracks is insurance coverage. After seeing two players sustain serious injuries Monday at the Senior Bowl practices, it reminded me of the importance of insurance.
Usually, obtaining insurance is the job of the financial adviser, but many players have yet to choose one. Regardless of whom my clients select, I constantly try to educate them on the financial and investment components of their careers -- basic things like accurately balancing a checkbook, keeping receipts, staying organized and the importance of insurance.
Many draftees drop off their parents’ or schools’ plans once they graduate. As a result, there are many who are working out without any type of basic health coverage. So I make sure my new clients are covered. Additionally, I get them an “umbrella” policy, which usually adds $1 million of insurance on top of their new or existing health, auto and even renter’s policies. So if they get into a car accident and there are liabilities above the usual limits, the umbrella policy kicks in to cover addition expenses such as attorneys’ fees and even lawsuit settlements (everyone should have this insurance).
The trick is to get the umbrella policy before a player is drafted. Many insurance companies no longer cover professional athletes since O.J. Simpson used his umbrella policy to help pay his legal bills. A draftee can usually lock in on this coverage and keep it going once he’s initially approved. An umbrella policy is a great deal because it usually cost less than $700 per year.
Pro athletes can become victims of frivolous lawsuits, so I recommend that my clients be over-insured.
As for career-ending disability insurance, I recommend it on a case-by-case basis for my clients. For one, it’s very expensive. A $1-million policy can cost about $20,000 to $25,000 for a 22-year-old player. And the player will only collect if it’s a true career-ending injury. So if a player tears his ACL while working out at the NFL Combine and doesn’t get drafted, but he gets back to nearly full strength, the policy won’t cover him because it’s not a “career-ending” injury. In addition, insurance companies try to exclude many previous injuries and won’t even cover later-round draft picks.
There’s nothing sexy about insurance, so nobody likes talking about it to the players. However, when something goes wrong, the first question usually is, “Did you have insurance?”
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Really great article by Jack and great questions by Jack.
I know I would want Jack to represent me. I follow him on twitter and he sounds like someone who really cares about what he doe and is in it for more than just the money.
The old saying of you can't have too much insurance certainly applies here.
My question is about Sam Bradford. If his football career had ended that first game in Texas, could he have purchased insurance while still in college?
It is pretty sad to hear that after 15 years of schooling through high school and college that some of the players do not know how to balance a checkbook or keep receipts. I do not blame the players, I blame the educational system.
This is a good article. I sell health insurance and I can speak to the Sam Bradford question. Yes he could have purchased health insurance assuming that he was on his parent's policy because most companies have an option for children that age off of a parent's policy to pick up a guaranteed policy on their own. It may not be cheap to cover the knee rehab, but it could be done.
These guys are Hawkeyes, They have been coached as well as any players in college across the country and will contribute once they get in to camp due to the coaching and training they received in I.C.
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Jan 26, 2010
03:03 PM
Great article, Jack. I have 2 follow-up questions if you have the time to answer.
1) I'm curious if players are more likely to follow through with acquiring insurance before the draft, or after the draft and before their contract is signed when they have a better idea of their financial situation.
2) Would you be willing to outline the hypotheticals in a specific case? I believe the Patriots drafted Tyrone McKenzie in the third round last year, and he ended up with a season ending knee injury in mini-camp. I know the team was obligated to negotiate a contract in good faith anyway, but I'm curious if he isn't able to make an nfl roster eventually what his best and worst case insurance scenarios would be (with no knowledge of what insurance he has)