PROFESSIONAL SPORTS COUNSELING PANEL DISABILITY INSURANCE (will Matt Barkley stay at USC?)

rolltide.com ^ | 12-2011

[doug from upland]

WHERE CAN A STUDENT-ATHLETE GET THE MONEY TO PAY FOR THE INSURANCE WHILE IN COLLEGE?

Family members upon whom the student-athlete is naturally or legally dependent may provide the money for the insurance premium. The student-athlete is permitted to borrow the money from a regular bank or savings and loan or credit union, provided a coach, booster or athletics staff member does not make the loan arrangements. The Panel and/or the associate athletic director for compliance will provide you advice if the student-athlete wants to secure a loan. The NCAA has arranged a disability insurance program so that qualified student-athletes may borrow the insurance premium money at a low interest rate. Any loan a student-athlete receives normally does not have to be repaid until the student-athlete signs a professional contract or until the student-athlete receives the disability benefits if the athlete is injured.

If the student-athlete does not sign a professional contract or does not make a professional team, the loan will need to be re-paid in full approximately six months after the end of the coverage. The other possibility is to restructure the loan with the bank or credit union with new repayment terms and at an annual interest rate.

[doug from upland]

If there is a way to legally fund a huge insurance policy, will more elite football players stay in college? If Matt Barkley had a $20 mil policy (cost 100 to 200K?), would he stay for another year to go for a national title? The insurance can be tricky. If it is not a total disability, the insurance company typically will not pay. An athlete could be seriously injured, go through rehab and be functional, but no team would want to touch him.

Should alum associations or others be allowed to pay for such policy? I think so. The result would be more athletes graduating.

[LRoggy]

This is hardly new, college football players have been able to do this for many years. Since the only likely purchasers of these policies have received full rides for their college the family likely has saved a lot of money on college costs, so they can likely afford it. If the athlete signs the contract they pay back the money; if they are hurt the premiums are repaid out of the disability claim.

[doug from upland]

I understand it is not new. One of the problems facing colleges in keeping elite athletes, is the enormous amount of money offered by the NFL. It would take a huge policy to keep them.