Frank N. Darras, Insurance Lawyer To The Pros, Reminds Young Athletes It’s Never Too Early To Protect Your Future
February 4th marked the much-anticipated National Signing Day, on which many high school seniors signed National Letters of Intent, publicly declaring where they will continue their education and athletic career.
“We would like to offer heartfelt congratulations to all Division I signees on their extraordinary achievement and selecting outstanding colleges,” says Frank N. Darras, America’s disability lawyer to the pros. “While these high school seniors still have much to contend with before they set off for college – such as finals, prom and graduation – it’s not too early for these athletes to consider the next step in protecting their dream.”
Playing NCAA Division I sports provides many athletes with the platform to develop their talents and capture a national audience. Many dream of becoming a professional athlete, but one injury at the collegiate level could dash the dreams of ever playing in a professional league. That’s why it’s important that athletes who have set their sights on a pro career take the steps to protect their future, beginning with disability insurance.
The options
The NCAA offers what it calls the Exceptional Student-Athlete Disability Insurance program, in which Division I college athletes can purchase career-ending coverage up to $5 million. This insurance is offered to potential first to third round projected athletes going to the NFL, NHL, MLB, NBA and WNBA.
According to the NCAA, the purpose of this program is to “provide the student-athlete with the opportunity to protect against future loss of earnings as a professional athlete, due to a disabling injury or sickness that may occur during the collegiate career.”
If approved, these athletes are immediately eligible for an NCAA-sanctioned loan with a competitive interest rate and no co-signer. However, the athlete is obligated to repay this loan in full when he or she signs a professional contract, when disability benefits are payable, or when the loan matures.
In some circumstances, $5 million in coverage may not be enough, so colleges and prospective draftees can turn to the private market. For example, Lloyd’s of London offers college athletes projected first to third round potential draftees additional career ending coverage up to $10 million and slot protection, so if an injury or sickness causes a drop in their projected draft slot, significant dollars won’t be lost.
In October 2014, the NCAA issued a waiver allowing its members to purchase loss of value insurance for its athletes and allowing athletes to borrow against future earnings to purchase disability plans.
Loss of value insurance, also referred to as draft slot protection, is intended to protect against the risk that a student-athlete’s draft stock will slip because of an injury or illness, potentially resulting in a smaller signing bonus and pro contract. Athletes must borrow from an established, accredited commercial lending institution which offers competitive interest rates and no co-signer.
Prior to the issue of this waiver, most schools used a loophole regarding the NCAA Student Assistance Fund to cover the premiums for their star athletes. Colleges can still use this fund to assist their marquee athletes, but it’s possible that students may have to purchase this coverage on their own. However, it also means that athletes could get a policy earlier than normal and borrow against future earnings to do so without breaking the bank and finishing their degrees before turning pro.
College athletes who are bound for the big leagues should talk with an experienced insurance agent and a disability lawyer with college, professional and pro team experience to determine what types of disability insurance will best protect their assets and earning potential.
Although recent Division I signees are probably thinking more abstractly about their athletic future, it’s never too early to begin discussion of exactly how they can protect it and get their schools to help fund the coverage, Darras says.
About DarrasLaw
DarrasLaw is the nation’s top disability insurance litigation firm. Led by Frank N. Darras, the firm reviews more than 2,500 claims a month. With its 100 years of insurance and hard-fought litigation experience, Darr asLaw has seen, evaluated, litigated, and resolved more disability and long-term care cases than any disability and long-term care litigation firm in the United States.
The firm represents clients of all backgrounds, from professional athletes to dockworkers to CEOs. DarrasLaw operates under a “pay it forward” philosophy and offers free consultations, free policy analysis and free claim help. DarrasLaw has recovered nearly $1 billion in wrongfully denied insurance benefits.