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Money Smart Athlete Blog

The Specialized Insurance Needs of a Professional Athlete

Jul 11, 2018 | Risk Management

Insurance is a very important tool, especially for professional athletes. Even if you never reach Michael Jordan’s or Kobe Bryant’s status, you need to be insured because the risks you face in your daily professional life are high.  Insurance will help you protect your health and the financial assets and wealth which you will accumulate as a professional athlete who is paid relatively well.

The risks a sports professional faces are numerous; in order to avoid disastrous losses you need to make sure that you are insured against all such risks throughout your sports career.  It only takes a bad moment to sustain a serious injury that could cost you your career; it might not be pleasant to hear, but it is a possibility and you should be aware of and prepared for the consequences.  It is during these bad moments that the right insurance plan will prove to be your most important ally.

Besides having a serious injury, there are other risks that need to be taken into consideration, such as an illness, an accident, a permanent disability, or even death. Life never turns out the way we plan it, and we all bear the risk of something unexpected happening. Professional athletes, with a short career compared to other professions, face a much higher risk.  When you are at a young age it is easier to be insured, as insurers prefer to cover someone who is healthy and has their whole life ahead rather than somebody who is old and more likely to have health and other issues. It is therefore critical that you get your overall insurance plan in place when you are young and in good health.

Regardless of the sport and the playing ability of athletes, their insurance needs are in most occasions the same. Every athlete should be aware of the below risks so that he/she can hedge against them and minimize potential losses.

  • Temporary disability injury: When you sustain this kind of injury, the insurance company is obliged to pay you a certain amount, usually on a regular basis, during the time you are injured and unable to participate in any sporting activities. Athletes receive this amount if an accidental body injury occurs either in or out of the playing field.
  • Career ending injury: The risk for an injury that will put an end to your career is rather high. There is absolutely no reason for an athlete not to be covered for a career ending injury as the risk is substantial.  It is important to be insured in the case of such injury and it’s even more important to have proper guidance by your risk advisor before choosing an appropriate insurance plan.
  • Accidental death: In the rare occasion where an athlete dies either during a game or an accident, such as the members of the Brazilian football club Chapecoense whose aircraft crashed two years ago, the insurance company is obliged to pay large sums to the athlete’s family under an appropriate plan which covers this hazard. Usually, clubs provide this kind of insurance to their players.  Make sure to check with your sports club to ascertain that you are covered.  If you are not covered you should talk to your risk advisor and put an appropriate insurance plan in place which will cover you for this type of risk.
  • Loss of Projected Income: This type of insurance covers young athletes with great prospects who, early on in their career, suffer an injury that will prevent them from reaching their potential. Through this plan, young athletes can protect themselves against the loss of future income.

You should always keep in mind that during periods of a serious injury or disability, it is in your best interest to keep your agent on board and by your side. You should see your agent as a form of insurance and it is therefore wise to view your agent fees as insurance premiums towards a successful career!  You should also remember that having no, or bad insurance could prove to be disastrous to your entire life.

With a good and comprehensive insurance plan, you can minimize the potential risks and protect yourself, your finances and your wealth. For more information on the different types of specialized insurance needs of professional athletes, you may get in touch with us at charis@apc-sport.com.

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