How Does Insurance For NFL Players Work?

[Keegs]

Asante Samuel is being a crybaby about the whole contract issue and can't bear to play one season for 7.5 or 7.7 million or whatever the hell it is. He is obviously concerned with getting injured the year he's franchised, and then when he's finally a free agent, he won't get as much money because he is damaged goods.

so why doesn't he just get the insurance i've heard about? Where you pay a certain ridiculous amount (ridiculous for normal people but plenty affordable for someone making 7.7 mil in one year). Asante could pay this and then if he gets injured, he cashes in on the insurance.

Is that how it works exactly? Because if so, this is a no brainer.

You get the insurance with your crappy franchise tag money, and worst case scenario is that you get injured and cash in.
Or you stay healthy and get a huge contract in a year or 2 and all it costed you was the money you payed for the insurance.

So what's his problem?

It makes perfect sense to me, which makes me think that i don't fully understand how this insurance crap works for nfl players when it comes to injuries.

So someone please correct me if i'm wrong.

 

[patman52]

The insurance pays only if you can not play again. Not if you blow out a knee and your timed speed goes down by .2 both of which will have the same effect on his pay.

Assante Samuel has not done one thing that I would not have done.

 

[Keegs]

The insurance pays only if you can not play again. Not if you blow out a knee and your timed speed goes down by .2 both of which will have the same effect on his pay.

Assante Samuel has not done one thing that I would not have done.

I figured that much, but how much do you think the insurance would cost for him?

A estimate is fine im just curious b/c the insurance seems like a no-brainer until you can get yourself a nice longterm deal.

 

[Gumby]

Lloyds of London is famous for saying they will insure ANYTHING.

But, there are a lot of variables in there.


If Asante thinks he can easily earn 3-4 times his $7M franchise tag; then that means he wants to insure himself against Salary Loss of salary that most rational human beings think he will never be given anyway. Nobody is going to pay $21M a year for a CB.

And say if Lloyds gave him a policy for $8M a year and he got nicked up and although just being slower said "i can't play anymore" when he still could but just for $1M. Is Lloyds out the $8M a year? How much would they charge for that coverage. Would have to think it would be prohibitively expensive.

I think anything other than catastrophic career injury (Edwards type) would be pretty much impossible to put a value on and the details would get way too complicated.


But all that said if the pats said they were willing to pay a $500,000 policy that gave him catastrophic coverage of $10M; would that help bring him to camp? (I think not - but who knows; maybe it would show good intentions)

I think the only thing that brings him to camp is a PATS promise not to use the franchise tag again next year. That is the golden ticket he is looking for.

 

[Crowpointer]

ask this guy.

 

[MoLewisrocks]

Lloyds of London is famous for saying they will insure ANYTHING.

But, there are a lot of variables in there.


If Asante thinks he can easily earn 3-4 times his $7M franchise tag; then that means he wants to insure himself against Salary Loss of salary that most rational human beings think he will never be given anyway. Nobody is going to pay $21M a year for a CB.

And say if Lloyds gave him a policy for $8M a year and he got nicked up and although just being slower said "i can't play anymore" when he still could but just for $1M. Is Lloyds out the $8M a year? How much would they charge for that coverage. Would have to think it would be prohibitively expensive.

I think anything other than catastrophic career injury (Edwards type) would be pretty much impossible to put a value on and the details would get way too complicated.


But all that said if the pats said they were willing to pay a $500,000 policy that gave him catastrophic coverage of $10M; would that help bring him to camp? (I think not - but who knows; maybe it would show good intentions)

I think the only thing that brings him to camp is a PATS promise not to use the franchise tag again next year. That is the golden ticket he is looking for.

I think you hit the nail on the head when you said the cost would be prohibitive. I also think the coverage would be so limited (career ending as opposed to career altering) it woudn't justify the cost. And if the team were to somehow pay for it, that premium money would have to hit the cap. And it would also set a troublesome precedent (I'll play for a little less if you insure me for what I wanted).

The only two tag holdouts left were he and Briggs. Everyone else got a deal done. Briggs is coming in now on a sweetened deal that includes no 2008 tagging. This is one deal Asante's agents will almost certainly say impacts their player.

 

[BelichickFan]

The only two tag holdouts left were he and Briggs. Everyone else got a deal done. Briggs is coming in now on a sweetened deal that includes no 2008 tagging. This is one deal Asante's agents will almost certainly say impacts their player.

Just because the Bears gave up something for nothing doesn't mean the Patriots will.

We have three viable options right now :

1 - Trade him, ala Branch.
2 - Have him be in by week 1.
3 - Have him hold out, be in by week 10 and have about $5M of cap room we can move forward via not earned LTBE bonuses into 2008 and Franchise him again.

And one of the options is OK with me.

 

[FreeTedWilliams]

Assante will be paid his entire salary if he signs the franchise tender, regardless of injury. It is guarenteed money.

He could take out an insurance policy to protect his "future earnings". But the cost would be high.

The fact that football does not have guarenteed contracts, makes the insurance very high.

 

[Isaac]

This issue has been discussed before and I, like Keegs (which is a bit of a scary thought), would LOVE to see an example: how much someone paid for how much coverage with which stipulations. This information must be out there!!

 

[BelichickFan]

This issue has been discussed before and I, like Keegs (which is a bit of a scary thought), would LOVE to see an example: how much someone paid for how much coverage with which stipulations. This information must be out there!!

Here you go :

"Premiums for policies secured through private insurers can cost anywhere from about $15,000 for $1 million of coverage to about $200,000 for $10 million, Lerner said. Policies are typically for 12- to 18-month periods, but they can be for as short as one game. If a career-ending injury occurs, a tax-free, lump-sum payout is made one year from the date of the injury."

http://www.insurancenewsnet.com/article.asp?a=top_pc&id=36541

So a policy for a career ender is relative noise (2% or so). It would be a lot more, I imagine, for the more typical season enders like torn ACLs but most players come back from them fine these days so while it would cost him money Samuel would still get a big contract in addition to this year's $8M if it were to happen.

 

[BelichickFan]

Here's another on McGahee and his one game rate :

http://espn.go.com/sportsbusiness/news/2003/0106/1488252.html

"Only five hours before, Lerner, an insurance agent based in Gainesville, Fla., had completed the paperwork on a $2.5 million insurance policy for the Hurricanes' sophomore stud who was projected to be a top NFL draft pick in April . . . Lerner declined to give the exact premium paid for the policy, but he did say McGahee's family took out a loan and paid less than $20,000 for it. Premiums usually cost about $10,000 per $1 million policy, but McGahee was able to get a better rate partly because it only covered him for the National Championship game and up until he signed an NFL contract."

The bolded part basically says on the order of 1%.

 

[Isaac]

Here's another on McGahee and his one game rate :

http://espn.go.com/sportsbusiness/news/2003/0106/1488252.html

"Only five hours before, Lerner, an insurance agent based in Gainesville, Fla., had completed the paperwork on a $2.5 million insurance policy for the Hurricanes' sophomore stud who was projected to be a top NFL draft pick in April . . . Lerner declined to give the exact premium paid for the policy, but he did say McGahee's family took out a loan and paid less than $20,000 for it. Premiums usually cost about $10,000 per $1 million policy, but McGahee was able to get a better rate partly because it only covered him for the National Championship game and up until he signed an NFL contract."

The bolded part basically says on the order of 1%.

Damn, that's MUCH cheaper than I thought it'd be. If these numbers are close to accurate, I see no reason why Samuel shouldn't just STFU, buy some insurance (say $250K for $25M?), and play for good money. (I'm generally neutral on such matters.)

Thanks BF.

 

[dryheat44]

Assante Samuel has not done one thing that I would not have done.

You would have intercepted 12 passes last year?