There is probably no greater example of the term "human capital" than a high-priced athlete, whose body will always be in harm's way and should be protected from a serious or career-ending injury or illness, particularly if it prevents the next big contract from becoming a reality.
With the NBA and NHL drafts on the horizon, it's fitting to discuss how to protect your athlete client's big payday through a permanent total disability (PTD) policy.
After a player has been drafted into the NBA and enters a 4-year rookie contract, it is imperative they preserve the big payday contract and future earned income. Looking towards the future, an NBA player will want to purchase insurance to protect their "big money" pay day and for the super star players, they'll want to safeguard their endorsement deals as well.
Draft Protection NBA Case Study
For those drafted into the NHL, the club owns the players rights during the contract period. After a rookie contract, the player is eligible for free agency and signs a long-term contract, the deal is fully guaranteed. However, until the athlete enters free agency, they are putting their body at risk every time they enter the ice.
As an advisor, deploying a permanent total disability policy to protect your athlete clients and their future income is a must. Field underwriting for athletes is a bit more detailed than for an executive, but with a basic education and a trusted partner in this space, you will be set up for success with your client.
The below are factors that are considered when rating a sports insurance policy:
- Player's age
- Player's position
- Player's skill-set
- Sport
- Player's future projections
- Does the player have the "IT" factor?
These policies offer 24-hour, worldwide coverage with an "own occupation" definition of disability - covering your client as a professional athlete. It protects against injury from a car accident or at-home accident, and also strokes, multiple sclerosis, concussions, and irregular heartbeats to name a few.
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