Athletic Career Planning
Young athletes have pursued lifelong commitments to reach the big leagues in their respective sports. Before a player is able to sign a professional contract they are at risk of losing everything they have worked to achieve. Should an athlete become disabled due to an injury or a sickness, it is unlikely that they will be drafted or their draft value may decrease which may mean a difference of millions of dollars.
An athlete’s body is his/her instrument in making a living. Physical performance and
well-being are key factors in a professional athlete’s economic survival.
Temporary Total Disability provides a monthly or weekly benefit if as a result of an
accidental bodily injury (on or off the field) or sickness, an athlete is physically unable to participate in their sport
Permanent Disability
Permanent Total Disability provides a lump sum benefit if as a result of an accidental
bodily injury (on or off the field) or sickness, an athlete is physically unable to participate in their sport. Additionally, the player has no hope of improvement sufficient to ever again commence a career as a professional in their sport. Permanent Total Disability is often referred to as “career ending disability”, and is designed to replace both personal and what would have been future income.
Not all injuries or sicknesses cause career ending disabilities, but some may certainly cause a diminishment of physical ability. An athlete may insure skill level with the “loss of value” coverage. If a player, projected to be a first round draft pick, suffers a significant injury before the draft and isn’t selected until the third round, the athlete stands to lose a sizable contract. This type of coverage may also be used by professionals prior to re-signing contracts
Professional football contracts provide the least amount of protection for a player. If a player is not performing as hoped, the team can waive the player at any time, and make much of the multi-million dollar contract worthless. Similarly, if an athlete is disabled and unable to make it through the rigorous training camps, they may also be waived. Contract Guarantee coverage will pay the remaining balance of the contract to the player if waived
A few sports may offer fully guaranteed contracts, but at the end of a contract there is no guarantee of future protection. If an athlete is an all-star caliber player, they are likely to sign a large, if not record breaking, contract at the end of the existing contract. In order to protect the income of a future contract, a player may insure the future value for which they are estimated to re-sign.