Insurance for CFB players?

[achiro]

I've heard mention from a few people about insurance you can get now that may have helped Sam in his decision. I know with enough money that you can pretty much insure anything but how does this work? Do they use the estimated amount a player would get if they went into the NFL and go from there? Who pays the premiums?

[yermom]

i was wondering about the premiums myself

[SOONER STEAKER]

Families may buy insurance thru 'Lords of London'. I have no idea how they come up with the value of the payout if a player should get hurt. I would bet they have a value based on position and status of a player.

I would bet the premium is pretty hefty.

[OUinFLA]

how much to insure my typing fingers?

SF.com would suffer without me

oh, wait.............other way around.

[ouwapiti]

that would be "lloyds of london".....not 'lords'

[Dan Thompson]

OUinFLA your deductable would be too high.

[BoulderSooner79]

I remember that Leinart paid $20k for a $1millon policy to cover his senior year at USC, so it ain't cheap. A big complication I've read about is that these policies cover "career ending" injuries and the payout starts a year after said injury. I guess that's to make sure the career did end. But even very serious injuries these days are not considered career ending, but they sure as heck can drop a star player from 1st round down to a day 2 pick. I don't know if there are any policies that would cover "career degrading".

You have to admire all our NFL eligible players that are coming back. The insurance policies are a bit of a safety net, but no panacea. They still are taking on significant risks by not going now.

[tmoore85]

You got it, the underwriter would probably be Lloyd's of London and you can put any payout you want on it. What does Sam feel his family would need and what is the price of the premium? When would Sam and his family need to pay the premium, NFL signing day, Bank loan to help with the large premium payments would be the issue.

Remember BOZ had a policy when he was with Seattle and when they let him go it kicked in something like 6-7 million. He had to fight in court about is shoulder was from football and not Arthritis and he did receive his pay out.

[fadada1]

I remember that Leinart paid $20k for a $1millon policy to cover his senior year at USC, so it ain't cheap.

compliments of usc's booster club, no doubt.

[WestAustinSooner]

Insurance policies may be bought through an NCAA-linked insurer or an outside insurer for a 12-18 month period.

The average $1MM policy through the NCAA-linked insurer is around $10-12K
The average $1MM policy through an outside insurer is around $15k.

The difference in the two is that the NCAA linked insurer (don't know the company) has a maximum policy benefit amount of $3MM. It also pays out the benefit over 30 months. The typical outside company is Petersen-Lloyds, has no stated maximum benefit and they pay out over a 12 month period.

Given today's developments in orthopedic surgery, it is becoming increasingly difficult to collect payments on these policies. You have to be certified by multiple doctors that your ability to play in the NFL is completely lost due to injury.

Bradford probably got a $10MM policy, and the premium ran around $100k or more. The policy premium may be legally financed by a bank, who takes the benefit plus interest as collateral. When Sam goes to the pros, he'll pay back the loan (financed premium plus interest) with his signing bonus.

Man, I'd like to write Sam's policy!

[rainiersooner]

Insurance policies may be bought through an NCAA-linked insurer or an outside insurer for a 12-18 month period.

The average $1MM policy through the NCAA-linked insurer is around $10-12K
The average $1MM policy through an outside insurer is around $15k.

The difference in the two is that the NCAA linked insurer (don't know the company) has a maximum policy benefit amount of $3MM. It also pays out the benefit over 30 months. The typical outside company is Petersen-Lloyds, has no stated maximum benefit and they pay out over a 12 month period.

Given today's developments in orthopedic surgery, it is becoming increasingly difficult to collect payments on these policies. You have to be certified by multiple doctors that your ability to play in the NFL is completely lost due to injury.

Bradford probably got a $10MM policy, and the premium ran around $100k or more. The policy premium may be legally financed by a bank, who takes the benefit plus interest as collateral. When Sam goes to the pros, he'll pay back the loan (financed premium plus interest) with his signing bonus.

Man, I'd like to write Sam's policy!

Clearly, you work in the insurance industry! :)

[ashley]

Does anyone know of a situation where any kid has been so unfortunate enough to collecr?

[BoulderSooner79]

That kid at Ball State this year suffered a career ending neck or spine injury. I don't know if he was insured, but he was leading the nation in receptions at the time, so it is likely he was a known NFL level talent. Stoops has admitted that Granger's back injury could be career ending. Although from the context I couldn't tell if he meant "college career" due to the rehab period of football career.

[Frozen Sooner]

Insurance policies may be bought through an NCAA-linked insurer or an outside insurer for a 12-18 month period.

The average $1MM policy through the NCAA-linked insurer is around $10-12K
The average $1MM policy through an outside insurer is around $15k.

The difference in the two is that the NCAA linked insurer (don't know the company) has a maximum policy benefit amount of $3MM. It also pays out the benefit over 30 months. The typical outside company is Petersen-Lloyds, has no stated maximum benefit and they pay out over a 12 month period.

Given today's developments in orthopedic surgery, it is becoming increasingly difficult to collect payments on these policies. You have to be certified by multiple doctors that your ability to play in the NFL is completely lost due to injury.

Bradford probably got a $10MM policy, and the premium ran around $100k or more. The policy premium may be legally financed by a bank, who takes the benefit plus interest as collateral. When Sam goes to the pros, he'll pay back the loan (financed premium plus interest) with his signing bonus.

Man, I'd like to write Sam's policy!

Very good job explaining it.

[8timechamps]

Given today's developments in orthopedic surgery, it is becoming increasingly difficult to collect payments on these policies. You have to be certified by multiple doctors that your ability to play in the NFL is completely lost due to injury.



One little thing to add to the great info. Most policy language will not specify that "playing in the NFL" is the qualifying factor.

Since nobody knows if an NCAA player would make a team (or even start), these policies typically stipulate a cap should the insured injury be life or limb threatening. In other words, a NCAA player may take out a $5mm policy, but may be capped at collecting $1mm.

These policies really only pay out in the event of catostrophic events.

I had a NFL rookie (Oakland Raiders, mid-90s) as a client when he first entered the NFL. Since I was a financial advisor back then, I only focused on what the projected payout would be.