The $5 Million Question: Should College Athletes Buy Disability Insurance?

Gifted student-athletes sometimes buy athletic-disability insurance to secure their potential pro earnings, but the expensive policies almost never pay out.
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AP / Michael Conroy

Kevin Ware's grisly leg fracture during Louisville's run to the title was excruciating to watch for anyone—but especially so for NCAA athletes, who were reminded of how quickly and violently hopes of an eventual professional career can be put in jeopardy.

Mishaps like Ware's help explain why athletic-disability insurance policies, once reserved for elite professionals and their clubs to protect the fragile appendages of valuable superstars for exorbitant amounts of money, are now fairly common among student-athletes. In just the last couple months, Texas A&M's Heisman Trophy winning quarterback Johnny Manziel and South Carolina defensive back Jadeveon Clowney both garnered headlines for their pursuit of insurance policies against career-ending injuries. Kentucky basketball big man Nerlens Noel, who tore his ACL in mid-February, reportedly paid between $40,000 and $60,000 for a $10 million policy through a private underwriter. Before Noel, Stanford quarterback Andrew Luck had a maximum policy of $5 million through a program known as Exceptional Student-Athlete Disability Insurance (ESDI) that the NCAA provides student-athletes it predicts will likely be high draft picks.

"Oh yeah, a lot more players are getting it, and if you watched the basketball game [that] Sunday, that's the reason why you buy it," said Dan Verdun, private insurance consultant at New York City-based Frenkel and Co., referring to the game during which Ware was injured.

But these policies, meant to hedge against risk, are risky in themselves: None of these student-athletes is likely to ever collect a dime, even if they are hurt. These guarantees cover "permanent total disability," meaning only policyholders who are never able set foot on a field or court again—not simply those who suffer injuries that may reduce their earning potential—can file a claim. With relation to auto insurance, it's the equivalent of having to completely total your car before ever being eligible to receive a payout. Couple that with the prohibitive cost of buying a high-premium policies for these unpaid athletes, and you've got another dubious element in what many believe is an already-absurd amateur system.

Of the thousands of policies bought over the years, virtually no college athlete has successfully filed a disability insurance claim. Verdun said he couldn't think of any. In the last 15 years, only one player is publicly known to have benefited from this kind of coverage: former University of Florida defensive tackle Ed Chester, who was projected to be a first-round NFL draft pick in 1998 before blowing out his knee after returning as a senior. He never played again, collecting $1 million on a private policy that was obtained for $8,000.

Since its inception nearly a quarter century ago, the odds with the NCAA's program aren't much better. Much of the reason for this is that advancements in modern medicine make recovery from once perceived career-ending setbacks much more likely.

"The number of payments has been relatively small through the years," says Juanita Sheely, NCAA travel and insurance director, "probably less than a dozen, and that's primarily because in order to collect on the benefits, you have to be completely unable to play your sport. As medical technology has advanced, there's a lot of good rehab facilities and procedures out there that, except for the most dire of injuries, most of the time you can come back from it."

The University of Miami's Willis McGahee, for example, wrecked his knee in the 2002 Fiesta Bowl and would have collected on a $2.5 million policy, purchased just weeks before the career-threatening injury, had he ultimately been unable to return to the gridiron. South Carolina running back Marcus Lattimore critically hurt his knee this past October, but still stands to be drafted come the end of the month. Likewise, Ware's compound fracture to his leg, a similar injury to the one that ended Washington Redskins quarterback Joe Theismann's playing career in 1985, is now mostly thought of as repairable with surgery and proper rehab time.

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Kevin Fixler is a writer based in Oakland, California. His work has appeared on Yahoo! and Sports Illustrated.

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