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Editor [∞]
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FB Update: Watson has $10 million insurance policy for career-ending injury
Aug 17, 2016, 12:38 PM
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Hall of Famer [24760]
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So he's saying he doesn't need McSham's eval...? Yep.***
Aug 17, 2016, 12:41 PM
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Orange Blooded [4659]
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Re: FB Update: Watson has $10 million insurance policy for career-ending injury
Aug 17, 2016, 12:41 PM
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I'm so confused. Who's paying the premium on a $10M insurance policy?
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Orange Blooded [2877]
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Re: FB Update: Watson has $10 million insurance policy for career-ending injury
Aug 17, 2016, 12:45 PM
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Clemson could chip in like Florida state did for Winston but most likely Watson himself; ncaa provides low interest loans for the players to purchase protection
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All-TigerNet [10402]
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Orange Blooded [4659]
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Re: FB Update: Watson has $10 million insurance policy for career-ending injury
Aug 17, 2016, 12:59 PM
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So an agent can't buy you a car while you're in school but can foot the bill on a $2500 premium every month? According to the article above, that kind of coverage would cost $20-30k per year. I seriously had no idea that someone other than yourself could pay for such a thing without violating NCAA rules. Even with a low-interest loan, you're still looking at $350-450 a month on $30,000 with a decent credit score. That's hard to do without a job. This is news to me, sorry.
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All-TigerNet [10402]
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Re: FB Update: Watson has $10 million insurance policy for career-ending injury
Aug 17, 2016, 1:08 PM
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I don't think the agent can do it legally but I'm sure there are ways around it.
A 10 million dollar policy would cost 100k a year.
I don't think I would have let that info out.
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Orange Blooded [4659]
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Re: FB Update: Watson has $10 million insurance policy for career-ending injury
Aug 17, 2016, 1:11 PM
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Exactly. To me it seems weird that this is even being published here. And I'm sorry for raising the question myself but that's one heck of a policy for someone without income. With all the eyes on Deshaun, I'm not really sure why this is public "news".
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All-TigerNet [13038]
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Why? This is hardly anything new. Many big-time prospects
Aug 17, 2016, 1:36 PM
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get these policies.
I don't know the inner workings of them, but who says Watson even has to pay the premium this year? If he doesn't get injured he will easily be able to pay it off after the draft next year, and if he does get hurt the insurance company could just deduct it out of the settlement.
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CU Medallion [55397]
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Orange Blooded [4659]
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Re: FB Update: Watson has $10 million insurance policy for career-ending injury
Aug 17, 2016, 12:54 PM
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This is literally the first I'm hearing about this. Why wouldn't the likes of Lattimore (and others) have taken advantage of such a thing?
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CU Medallion [60227]
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Orange Blooded [4659]
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Re: he did
Aug 17, 2016, 1:15 PM
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Had NO idea! Lol.
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Orange Blooded [4659]
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Re: he did
Aug 17, 2016, 1:17 PM
[ in reply to he did ] |
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"Lattimore reportedly paid upwards of $15,000 in premiums for his $1.7 million in coverage. Players can borrow the money to pay for the premiums..."
Once again, no mention of how he paid those premiums without a job whilst in school, which was the whole point of my question in the first place.
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Orange Blooded [4659]
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Re: he did
Aug 17, 2016, 1:18 PM
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And if Lattimore paid $15,000 for $1.7M... It doesn't take a math whiz to estimate what the premiums look like for Deshaun's $10M policy. Still, no one is saying how the premiums are getting paid.
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Orange Blooded [2986]
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I would imagine some sort of deferred payment, kinda like
Aug 17, 2016, 1:21 PM
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student loans. Students don't pay any money until after school (and sometimes even deferred even longer).
The interest would just accrue from the time the policy was enacted until payment.
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CU Medallion [60227]
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All-TigerNet [10402]
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Re: Fournette doing the same thing
Aug 17, 2016, 1:28 PM
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I'm sure Fournette has this policy just covering this season.
What happens if he just sucks this season and his draft status drops.
He decides to play another year in college would the INS company still Allow him 10 mill in coverage?
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CU Medallion [60227]
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some dude (apparently an expert) in the comments said:
Aug 17, 2016, 1:29 PM
[ in reply to Fournette doing the same thing ] |
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Bryan Fisher
May 13, 2016
I may be able to answer some of these questions:
1. Premiums for these policies are frequently paid by bank loan against the athlete's future earnings. The loan repayment is due when the athlete signs an NFL (or MLB, NHL, NBA or WNBA) deal or collects on his insurance policy in the event of injury. The parents are often co-makers or guarantors on the loan. True, almost no-one has $160k sitting around but there is nothing untoward about the loan process. It is specifically approved by the NCAA.
2. Insurance is regulated. Primarily by the state in which the underwriter and agent are licensed to write coverage. However, not all state laws are the same and some states do not regulate this type of insurance at all. Moreover, as demonstrated by the lawsuits filed by Lloyd's of London against Breslin and Lee, it is often unclear which state has the jurisdiction to regulate the policies.
But here is the bigger point; the NCAA created this insurance market. It did not exist before and continues to exist only because of NCAA rule. Yet, the NCAA does nothing, zero, to regulate the market. It does not vet the policies for fairness and scope of coverage. It does not regulate the premiums to a fair level. Indeed, it can not even tell you how many policies have been issued under its exceptional student athlete program or how many claims have been made or paid. Pathetic.
3. As a result of 2 above and its relationship to the athlete, each school is obliged to inform the athletes of the availability of insurance coverage and advise on the selection of and payment for appropriate coverage. Most do not. Those that do almost always get it wrong because the athletic staff has no experience or knowledge in the area. There is also the competing interests of the school and athlete when this topic arises. The athlete wants as much coverage as possible and for the school to pay the premium. The schools are often reluctant to pay all or part of the premium but they all want the star athlete to return for a final season. So do we, the fans. The result is most athletes are given no or poor advice on a huge decision. Some come to me--about one or two a week--seeking guidance on the topic. I provided it at no cost. i also speak to athletic administrators and athlete groups on the topic. But the real solution is for the school to call on its fleet of retained attorneys to advise the athletes. Indeed, many of the large schools have law faculty available to advise the athlete. Very few offer this service. Again, pathetic.
4. The payment of premiums from the student assistance fund is a sticky situation. Recall the James winston situation at FSU. I think the school should pay the premium but not at the expense of reducing stipends to other athletes from the fund. The solution, the NCAA can authorize premium payments forms the general fund of the athletic department. But that will not happen because the NCAA is first and foremost concerned with maintaining the facade of amateurism of the student athlete. Such payments would erode that position.
5. I have handle these cases for over a decade and all over the country. I have a very good perspective on who wears a white and who a black hat. Les Miles is one of the few coaches that consistently demonstrate true concern for and interest in his athletes. He, along with Verge Ausberry and Dean Dingman, are about as good as I have seen at getting the athlete coverage in a timely manner. Fournette is an example. He needed to have his limits increased before spring practice but the process was moving slowly. Literally, one phone call to the above mentioned guys and coverage was in place and he was protected before he started spring ball. THAT is very rare. Most athletes request coverage in January and do not get bound for coverage until August or September leaving each with a lot of uninsured injury risk.
There are very easy fixes for all of these issues if only the NCAA expresses some interest and takes action on the issue. Until then, we will force change one lawsuits at a time against the insurance companies, universities and, very soon, the NCAA. It should not be this way. Change is long overdue.
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Re: some dude (apparently an expert) in the comments said:
Aug 17, 2016, 1:33 PM
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DW is smart and I highly doubt he is doing anything that would get him or Clemson in trouble .
But you see 10 mill in coverage and go WOW.
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Orange Blooded [4659]
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Re: some dude (apparently an expert) in the comments said:
Aug 17, 2016, 1:34 PM
[ in reply to some dude (apparently an expert) in the comments said: ] |
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Honestly... Hats off to you sir for the thorough answer. I'm glad to see that I'm not the only one who finds it problematic.
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CU Medallion [60227]
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read the next line....
Aug 17, 2016, 1:18 PM
[ in reply to Re: he did ] |
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"Players can borrow the money to pay for the premiums. The loan must then be repaid after the player signs a professional contract or receives benefits under the policy."
I don't think a player the potential of Lattimore or Watson has any trouble having some bank front them a loan, knowing they will be a millionaire in a few months.
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Orange Blooded [4659]
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Re: read the next line....
Aug 17, 2016, 1:38 PM
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I hear what you're saying but typically, banks don't put a loan in forbearance at the day of signing. They don't say "here's $30,000 to cover those premiums, we know you're good for it. We see you on ESPN every Saturday, just pay us after you get signed." Until scooter chimed in, that's why I kept asking who is paying the premiums. If not for the policy itself, then the small loan from the bank that everyone keeps alluding to. Like I said earlier, for a college kid to get a $30k loan with no income and limited credit score, and then to have the bank defer payment until after they get signed is absolutely an exception, not the rule. And a risky one at that.
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Associate AD [837]
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Re: read the next line....
Aug 17, 2016, 1:45 PM
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Balloon loans are not uncommon. The loan probably has the insurance policy as collateral and the money may go directly to the insurance company.
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Orange Blooded [4659]
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Re: read the next line....
Aug 17, 2016, 1:49 PM
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So glad I'm not working in the banking / insurance world. And cheers to those of you who are! It's clusterf**k city
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Legend [18133]
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Re: read the next line....
Aug 18, 2016, 10:12 AM
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> So glad I'm not working in the banking / insurance
> world. And cheers to those of you who are! It's
> clusterf**k city
Both industries are among the most highly regulated.
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Orange Blooded [3573]
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The insurance company is acting as the bank
Aug 17, 2016, 2:04 PM
[ in reply to Re: read the next line.... ] |
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most of these are "total disability" or "total loss" policies that very few players actually claim. They aren't loss of income policies. They don't protect you if you have an injury and just fall in the draft. If you play you don't collect and then you have the cash to pay the premium. If you make the claim, they take the premium out of the payout.
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Orange Blooded [4659]
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Re: The insurance company is acting as the bank
Aug 17, 2016, 6:21 PM
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I wish health insurance, car insurance, life insurance, home insurance... Heck, every insurance policy worked like that. You don't have of make a premium payment until you file a claim? Haha. Sign me up!
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Legend [18133]
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Apples and oranges
Aug 18, 2016, 10:55 AM
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But, yeah, it would be nice if apples were oranges.
Wut?
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Associate AD [837]
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Re: he did
Aug 17, 2016, 1:38 PM
[ in reply to Re: he did ] |
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The athlete borrows the money to pay the premium either from a fund at their school set up for that purpose or from the a fund set up by the NCAA if their school does not have a fund. They pay it back from professional earnings or from the insurance payout.
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Orange Blooded [2683]
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It's in the article
Aug 18, 2016, 10:50 AM
[ in reply to Re: he did ] |
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From the article...
Premiums for such policies are costly -- $20,000 to $30,000 a year for the high-end coverage, $5,000 to $8,000 on the low end. To pay for it, the NCAA offers a loan program at 1½ percent above prime, although balances must be repaid regardless of when a player gets drafted -- or if drafted at all. Any player with remaining college eligibility can participate in the program, though most wait until after their sophomore seasons, Sheely said.
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All-In [40929]
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Oh Great.....300,000 More Women Just Smelled Blood
Aug 17, 2016, 12:42 PM
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Be careful Deshaun.
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CU Medallion [73569]
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"I'm definitely on the pill, you can trust me"***
Aug 17, 2016, 1:46 PM
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Orange Blooded [4965]
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Clemson is paying the insurance premium!
Aug 17, 2016, 2:13 PM
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As allowed by the NCAA, Clemson is paying for the premiums, which typically run about $8,000 to $10,000 per $1 million in coverage. Loss of value insurance pays out if a player drastically falls in the NFL draft because of injury.
When purchased by the school, the NCAA allows up to $10 million coverage for a career-ending injury and $5 million for loss of value injury.
Watson said Clemson's coaching staff recommended the insurance policies, and Clemson coach Dabo Swinney said he discusses those options with his players each year.
"We have a process in place at Clemson," Swinney said. "First of all, they have to qualify. Certain guys qualify for that. Every year, that's one of my checklist items -- to make sure our guys (know about it). Sometimes they don't want it, but I want to make sure they understand what's available and what their opportunities are."
Swinney said it's rare to collect on the policies.
"Very seldom do those things pay off," Swinney said. "You have a better chance to get struck by lightning than have a career-ending injury, but there is loss of value insurance as well. All of that stuff is available. We educate them. I'm big on that."
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