Pigskin policies: Super quarterbacks Tom Brady, Eli Manning have super insurance needs
New England Patriots quarterback Tom Brady and New York Giants quarterback Eli Manning are two of the most valuable athletes in professional sports. That’s why they need plenty of insurance, just as they need plenty of on-the-field protection from their offensive linemen.
“The NFL provides some coverage, but it’s not the end-all, be-all of coverage,” says Dan Verdun, an insurance broker at James A. Connors Associates Inc. in New Jersey, which sells insurance to professional athletes. “An athlete should be responsible for taking proactive measures to come up with coverage.”
Here’s a look at some of the coverage that Brady and Manning might consider buying.
Given the rough nature of the game, pro football players are highly susceptible to injury. According to a report released in 2011 by the National Football League Players Association, 63 percent of all players sustained at least one injury over the course of the 2010 season. More than 5 percent of those players suffered injuries that benched them for the rest of the season.
Given the likelihood of injury, a good health insurance plan is imperative. The NFL provides comprehensive health coverage to current players and extends the plan for five years after a player’s career ends. At that point, however, a player is on his own. “It’s pretty tough to find somebody who will insure you if you’re that beat up,” Baltimore Ravens cornerback Domonique Foxworth told reporters.
Verdun agrees that getting private coverage may be a problem.
“Former football players are not always top prospects for many companies,” he says. “If the player doesn’t meet the general guidelines, the company will decline coverage or write the coverage at a higher cost.”
Although NFL players often are guaranteed millions of dollars in income for the length of their contracts, some players take out their own disability contracts to protect against the loss of pay and bonuses.
“It’s very important for pro football players to buy disability insurance,” says Richard “Big Daddy” Salgado, head of Coastal Advisors, a New York insurance group that counts many professional athletes among its clients. “A player may be in the last year of his contract when he loses his ability to perform, so it can protect future earnings.”
Such coverage can be pricey, however: Portfolio.com estimates a premium rate of 5 percent for every $1 million of coverage for young quarterbacks.
Verdun says a player at Brady’s and Manning’s pay level may not need the disability coverage, but it’s essential for lower-rung players.
“Anyone who wasn’t a first- or second-round draft pick may be signing a three-year contract for the minimum salary,” he says. Disability insurance can protect such a player’s income if an injury knocks him out of commission.
The NFL buys life insurance policies for all of its players. For instance, when Washington Redskins safety Sean Taylor died in November 2007 after being shot by an intruder, his family was entitled to $600,000 in death benefits from a life insurance policy. Among other policy benefits were five years of dependent health coverage; $100,000 deposited into a health reimbursement account; and $103,560 put into a 401(k) plan.
Once they’ve concluded their NFL careers, Brady and Manning will be eligible for the NFL’s “vested inactive” life insurance plan, which provides up to $25,000 for beneficiaries. They’ll probably want to buy additional life insurance to make sure their families are taken care of, Salgado says.
Long-term care insurance
NFL players are subject to frequent concussions. A 2000 study of former NFL players found that more than 60 percent had suffered one concussion, and more than one-fourth had suffered at least three. In many cases, these head injuries can take their toll. A 2009 study commissioned by the NFL found that Alzheimer’s disease and dementia appeared in former players ages 30 through 49 at a rate that was 19 times higher than in the general population.
With the likelihood of dementia, as well as the potential for life-altering physical injuries, purchasing long-term care insurance can prevent family members from shouldering the financial burdens. “A lot of these players with brain injuries are retiring from the NFL, going bankrupt and don’t have the means to pay for long-term care,” Verdun says.
Recently, the NFL began offering a long-term care plan to retired players between ages 50 and 75, covering 100 percent of the premiums. However, players are not automatically accepted for enrollment. Only about three-fourths of applicants have been approved so far. “I wish that number were 100 percent and everyone could be approved, but a decision was made to make the benefit available to as many ex-players as possible, and by accepting applicants up to age 75, the decline rate increases,” former NFL player George Martin, president and executive director of the NFL Alumni Association, says in a news release.
To ensure that they’ll be covered if they need long-term care, Brady and Manning may consider buying long-term care insurance on their own while they’re still young. Verdun points out that the cost of the insurance climbs as a person ages.
Umbrella liability insurance
Brady and Manning would be protected by the NFL in the event that they injured a fellow football player during a game or practice. But they’d need an umbrella liability policy to protect them against other potential risks, such as injuries to another person in a car accident, Verdun says. Such policies provide additional coverage when other policies, such as auto or health insurance, are exhausted.
As popular, wealthy figures in the public eye, there’s a chance that Brady and Manning will be the targets of bogus lawsuits — or perhaps even be kidnapped and held for ransom. Specialized policies, such as ones that cover slander and defamation of character in the first case, and kidnap-and-ransom situations in the second, can protect them financially.