An Injury or Illness Can Knock an Athlete Down: Disability Insurance Helps Them Get Back Up.

Authored By: Christian Hanson | Publish Date: June 3, 2019

As a former professional hockey player, I’ve had many conversations over the years with teammates about what the future may hold. The conversations always included some variation of the following bottom line: ‘What am I going to do when I am done playing? I’ll figure it out when the time comes.’

Unfortunately, for many athletes that time can come when they least expect it.

“I thought my whole life was to be a hockey player,” recalls Craig Cunningham, whose professional hockey career came to an abrupt end when he experienced full cardiac arrest before a game. His life was further complicated a month later when his left leg had to be amputated below the knee due to circulation issues caused by the cardiac arrest.

Though sometimes it may seem like it, being a professional athlete doesn’t make someone superhuman. Athletes are not immune to illness because they are in excellent shape. They are just as susceptible to a chronic health condition, such as cancer, diabetes, or mental illness, as they are to a physical injury suffered while playing.

This is why professional athletes need disability insurance.

  • What is professional sports disability insurance?

With disability insurance in place, a professional athlete can protect themselves against current and future lost earnings. It can also provide the financial stability to allow an athlete to concentrate on getting back on their feet (sometimes literally) and, if they are unable to return to their sport, it affords them the time they will need to determine what they are going to do next.

  • What types of disability insurance are there?

There are two types of professional sports disability insurance: temporary total disability and career-ending disability. Each can be purchased separately or together as part of a comprehensive plan.

Temporary total disability insurance can protect an athlete, whose earnings are not guaranteed, in the event that they are temporarily unable to play their sport. For example, if a tennis player who just saw her earnings double after her first tournament win breaks her hip in a car accident and is unable to play for six months, she has no way to earn a living during recovery. By having a temporary disability insurance policy in place, she would receive her potential lost earnings while she rehabilitates and trains to get back on the court.

Permanent total disability insurance, also known as career-ending disability insurance, provides 24-hour coverage or can be limited to only when a player is not working. It’s protection that pays a lump sum amount if the insured athlete is unable to participate in their sport ever again as a result of injury or sickness.

  • How much disability insurance does an athlete need?

When deciding how much disability insurance coverage to purchase, it is important to consider not only what an athlete is earning now, but what they might earn in the future.

Take for instance a 21-year-old, rising professional hockey player. He is in the last year of his entry-level contract and due to sign a $60 million deal in the off-season. A disability insurance policy will protect his future earnings should he suffer an injury or illness.

Of course, it’s not just athletes that get hurt.

Actors and musicians also risk a drastic change in lifestyle if they become disabled. In most cases, like a professional athlete, their chosen profession may be all they have ever known. They likely don’t have a second source of income, consequently, if they are unable to perform they won’t be able to earn a living. Having disability insurance in place protects the level of income they are accustomed to and protects their standard of living in the event they were unable to work due to injury or illness.

Having disability insurance coverage is also a wise decision for those professionals who do not work in the spotlight of the playing field or stage.

In fact, high income earners who are employed outside the sports and entertainment industries can actually be more exposed to risk if they become injured or sick. Many high-earning professionals incorrectly assume they have enough disability insurance in place through their company’s group coverage. Unfortunately, this is usually not the case.

Group long-term disability insurance policies are limited as to how much they will pay out each month to a covered employee. The limit is usually capped somewhere between $5,000 to $10,000. For high earners, this could leave them short on monthly income. Here’s an example:

Bob is a 50-year-old executive, married with three children. His annual income is $275,000 and his disability insurance group plan has a maximum monthly payout of $10,000. This only covers 43.5 per cent of his pre-disability take-home income, which is insufficient to cover his mortgage and other living expenses.

As this scenario illustrates, the more someone earns the more they are at risk.

By supplementing his group disability insurance coverage with a personal disability insurance policy, Bob would have the coverage he needs to meet all of his day-to-day expenses.

No matter what arena your client is playing in ‒ sports, entertainment, or business ‒ make sure they are protected from the financial impact of a life-changing injury or illness. Protect them with disability insurance coverage.

 

Christian Hanson is assistant vice-president of sports at Sutton Special Risk.

chanson@suttonspecialrisk.com


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