An Advisors' Guide to Excess & Surplus Disability Insurance

Protecting the Puck: Essential Insurance Strategies for Hockey Players

Posted Wed, Jun, 12th, 2024
By Exceptional Risk Advisors

For hockey athletes, their ability to play is their greatest asset. It is their ticket to potential future income. By the very nature of the sport, their body is continuously in harm’s way and should be protected from a serious or career-ending injury or illness, particularly if it prevents the next stage in their career from becoming a reality.

To illustrate this point, let's explore the different journeys taken by hockey players in North America. Canadian players often join a junior hockey league straight out of high school, while their American counterparts have the option of being drafted into the pros immediately or honing their skills at the college level before making the leap to the professional arena. Whether headed for university or coming from high school to junior leagues, players should prioritize securing a draft protection policy or insurance coverage to shield themselves from career-ending injuries and safeguard their future earnings.

As these hockey players progress, their financial and physical stakes only increase. The National Hockey League’s club owns the player's rights during the contract period. After a typical 1-to-3-year contract is up, the player is eligible for free agency. During the rookie contract years, the hockey athlete is building up speed and agility but also putting his body at risk every time he gets slammed against the boards. Here’s when it’s imperative that an athlete owns permanent total disability (PTD) insurance. The ability to play is an athlete’s source of income, so it’s important that in a physically demanding sport, players need to protect their contracts.

Once a player reaches free agency and signs a long-term contract, the deal is fully guaranteed. However, an NHL guaranteed contract has a significant vulnerability. It can be voided by a club if the player becomes injured or ill away from playing with the team. This is why it is crucial to safeguard a multiyear, multimillion-dollar deal with Off-Ice Coverage, which offers protection beyond game day and practice.

To help illustrate, we recently shared a case study of an NHL free agent. The player signed a 5-year contract with an NHL team for an estimated $35 million, fully guaranteed while training, playing, and practicing professional ice hockey. However, the advisor identified a significant risk: the club could void the contract if the player were seriously injured or critically ill while off the ice. 

Explore the Full Case Study Here

These examples highlight the unpredictable nature of an athlete's career. There often comes a time when a career-threatening situation occurs off the ice, a circumstance that the athlete has no control over. For example, the 25-year-old center, Nolan Patrick, once the second overall pick in the 2017 NHL draft, finds himself grappling with a debilitating migraine disorder and head injuries, pushing him towards an early retirement. In 2021, Patrick inked a 2-year deal worth $2.4 million with the Las Vegas Golden Knights. Before joining the Knights, he had secured a rookie contract with the Philadelphia Flyers, spanning 3 years and valued at $11.3 million. While the NHL has not officially confirmed Patrick's retirement, the outlook appears grim for the free agent.

Another such example is Bryan Bickell, the Carolina Hurricanes forward, who announced his retirement after being diagnosed with multiple sclerosis. At only 31 years of age, Bickell potentially had in front of him another four or five years’ worth of paychecks. Putting a permanent disability policy in place prior, which also covers any career interruptions due to a life-threatening illness, would have insured the player a substantial supplement to future paydays now gone.

These cases underscore the importance of proactive planning and insurance coverage. What most athletes can’t see coming is the end of their careers, particularly if it comes prematurely due to a career-ending injury or illness. As insurance advisors, it's crucial to emphasize to athlete clients the value of safeguarding their future with comprehensive insurance policies. Such foresight can make all the difference in maintaining financial stability when the unexpected happens.

Join us for an insightful and comprehensive webinar designed specifically for insurance advisors: "Protecting Athletic Careers: Disability Insurance for Professional Athletes." Presented by industry experts Sean Callaghan and Tim Smith from Exceptional Risk Advisors, this session will equip you with the knowledge and tools to better serve your athlete clients and sports agent relationships.