Top Pick in NFL Carries Disability Insurance
May 3, 2011
Jamie Fleischner

Jamie Fleischner

3 May, 2011

by Christopher Tritto May 17 2010. Published on

Sam Bradford is about to get a huge payday as the top pick in the NFL draft. However, he had a backup plan to bring in the money had an injury sidelined him permanently.

When quarterback Sam Bradford walked onto the stage of Radio City Music Hall on April 22 as the first pick in the NFL draft, he took a huge step closer to securing tens of millions of dollars in guaranteed income from the St. Louis Rams. But he always had a backup plan.

Like nearly every top prospect with the potential of landing a pro football contract, Bradford took out an insurance policy to protect himself in case an injury on or off the collegiate field kept him from making the leap to the NFL.

As recently as five or 10 years ago, only the occasional prospect would insure himself against injury, said Keith Lerner, who specializes in providing disability insurance coverage for top amateur athletes through Total Planning Sports Services in Gainesville, Florida. But the soaring value of signing bonuses and salaries, combined with the high-risk nature of football, has quickly made big-time disability policies a standard practice among the college elite.

“I would venture to say there was nobody drafted in the 2010 NFL draft first round that did not have a disability policy,” said Lerner, who said his clients include a couple of this year’s first-rounders. “It used to be the big policy was $1 million, but now the average is $3 million. Lots of guys take out $4 million to $5 million, or even as much as $10 million worth of coverage in their senior season.”

Bradford was a fortunate case. The former Heisman Trophy winner recovered fully from an injury to his throwing shoulder that sidelined him most of last year.

He and his insurance agent—father Kent Bradford, president of Bradford-Irwin Insurance in Oklahoma City, Oklahoma—declined to specify exactly when he took out his policy or how much coverage he had. But it is safe to say Bradford spent tens of thousands of dollars to offset the risk that his injury would keep him from reaching the professional ranks.

Bradford would have qualified for about $5 million to $10 million in coverage before the collegiate season started last fall, based on his projected draft potential, according to industry sources. At today’s going premium rate of about $7,000 to $10,000 a year per $1 million in coverage for college players, Bradford likely paid $50,000 to $100,000 for disability insurance during the past year. Some players and their families take out loans to pay for such premiums.

Among the 224 players drafted into the NFL over the seven rounds that concluded April 24, about 150 probably qualified for such pre-draft insurance, Lerner said. Records of such policies are not compiled by a central body, but industry experts estimate the niche market for college football player disability insurance could be as much as $4 million.

Lerner said less than 5 percent of his clients make claims, and disability insurance does not cover the lost income that results when a player slips in the draft from, say, the first round to the second. But for those whose high hopes of an NFL contract are never realized due to injury, the policies can provide a real benefit.

“The reality is football is a violent game with injuries that can be career ending,” Lerner said. “The dollars at stake are so great, how can anybody not insure themselves for a couple of million dollars?”

Prospects are not the only ones taking on expensive premiums. Once a player makes it to the NFL, he often takes out a new disability insurance policy to protect unguaranteed portions of his salary. Last year’s top draft pick, Detroit Lions quarterback Matthew Stafford, secured a six-year, $72 million contract that included $41.7 million in guaranteed money. Bradford, who is similarly represented by agents Tom Condon and Ben Dogra of CAA Football, can expect an even bigger deal with upward of $45 million guaranteed.

But since guaranteed portions of player contracts, such as signing bonuses, are typically paid within the first year of a contract, teams have little to insure in the out years of a player contract. Players usually take out their own policies if they want to insure the unguaranteed portions of their package against a career-ending injury.

“It’s possible we may spend zero (on disability insurance),” said Kevin Demoff, Rams executive vice president of football operations and chief operating officer. “In regards to Bradford, typically a quarterback covers that himself, but that is something we will talk about with him.”

Based on the general NFL premium rate of about 5 percent for every $1 million of coverage for young quarterbacks, Bradford would have to spend as much as $1.5 million annually to insure his unguaranteed salary if his contract winds up similar to Stafford’s.

But with such a large check sure to come his way as the top draft pick, Bradford might choose to pass on such coverage.

“Sam is going to make so much (guaranteed) money in his contract that he doesn’t need a disability policy,” Dogra said. “After taxes, Stafford cleared about $28 million guaranteed and is already set for life. Once you get to a certain point, insuring the rest may not matter. It depends on the player, his contract, and his spending habits.”
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