‘First Round Draft’ Insurance Policy Winning Over Students, Parents

More and More Star College Athletes Score an Insurance Contract Before Going Pro

One of the top collegiate football players in the country blows out a knee in his final game before hoping to go professional. For some star college athletes and their families, this scenario is a legitimate worry.

With the National Football League draft set for Saturday, April 23, Insurance Journal recently spoke with Keith Lerner of Florida-based Total Planning Sports Services. A Chartered Life Underwriter and Chartered Financial Consultant, Lerner specializes in providing insurance policies to college athletes who plan to go on to play professional sports, a market he has been serving for 17 years. Lerner talked about coverages available for collegiate athletes, the risks of not being insured, which sports are the most injury-prone, and more.

IJ:What are some of the changes you have seen in the 17 years in this line of work?

Lerner: The changes are really the amounts of the insurance, the level of knowledge for the student-athletes, the parents, as well as the administrators of the school. When it first started, it was a player here or a player there, no one had really heard much about it. Now I get calls in my office from parents and players who are interested in getting a policy. I would venture to say that there is probably nobody picked in the NFL or National Basketball Association draft that doesn’t have this protection in college.

IJ:Did the Willis McGahee situation (former University of Miami-Florida running back who went down with a major knee injury in the 2003 National Championship game) bring a little bit more light to the situation?

Lerner: There is no question there was a lot of notoriety for the insurance policy and the industry in that case, but there had been some other pretty high-profile cases out there. The sheer numbers of dollars that these professional athletes stand to lose if they get injured in college are just going up astronomically.

IJ:Do we see more college players going pro earlier than in previous years because injuries could really set back their career?

Lerner: There is no question about that. I’ve talked to some college players that have said if they could have gone right after high school to the professional ranks for football, they would have. We see that in basketball. One of the major concerns is that if you get hurt while in college, you really have nothing to fall back on.

IJ:Are college athletes worried about their reputations coming out of college if they get injured during their playing days and might be “damaged” goods at the next level?<$>

Lerner: Absolutely. If a player gets hurt prior to the draft or the season before the draft, there is question in the scouts’ minds whether that player has had a full recovery. That’s what makes the Willis (McGahee) case so interesting. He had a severe knee injury and most of the times, doctors can say with modern medical technology these days, 90 percent of the time you’re going to be able to come back, but there is always that other 10 percent. That’s what we’re dealing with when it comes to these insurance policies — the 10 percent of those athletes that can’t come back from an injury. If you’re in that small percentile that aren’t going to recover, the insurance policy gives you the financial security to fall back on.

IJ:Do other health-related factors come into this market?

Lerner: Hank Gathers was a basketball player at Loyola who had a heart problem. Most people don’t think about it, but if you have a heart problem or another sickness that will prevent you from playing, you can collect as well. Hank Gathers had a heart problem that was diagnosed and had he stopped playing, which was a choice given to him, he would have been able to collect on the policy. He unfortunately chose to continue to play and we all know the end result. That was a case where he probably shouldn’t have played and probably would have collected.
IJ:What about the situations where drugs or other illegal substances are involved in halting a player’s career? Can that person still collect if they had a policy?

Lerner: No, that is an exclusion. Any type of self-inflicted injury is excluded. Any type of illegal drugs will be excluded as will any type of performance enhancing drugs if they are excluded by the governing body of your sport. If you use steroids and go in the weight room and you pull a muscle and can’t ever play again, you would be covered. In football if using steroids where they are supposedly illegal and banned, then you have no coverage.

IJ:What about policies for the “non-contact” sports out there?

Lerner: I wrote the first tennis player ever in NCAA history and the first female golfer in NCAA history. In terms of sheer numbers, football will have more policies. Next would be baseball or basketball. College hockey is another one, where in players can be drafted and stay in school. There are different sets of rules for some of the sports.

IJ:What are some of the questions or concerns parents have when they come in to discuss obtaining a policy for their son or daughter?<$>

Lerner: One would be, ‘How do we pay for the insurance?’ Two, is unless they’ve heard from a really good source, ‘Can you really insure someone who has no income at all for $3 million, $5 million or $10 million?’ It almost doesn’t sound true. They’re use to buying auto insurance and you have to have the car to get the auto insurance. This is a policy that most parents have maybe heard or read about. Now that their son or daughter is playing on the collegiate level, their interest grows as how to best protect their children.

IJ:What have you seen as far as changes in equipment to protect athletes?

Lerner: Most major programs now start with off-the-field preparations. It is in the weight room, the training room, the certified trainers, the taping, the hydration, so we don’t have the heat problems. It has been a whole process to make sure the athletes are a lot better conditioned and I believe that goes a long way in making sure that a player is not going to have a career-ending injury. You also have advancements with modern medical science. You have screws that you can use that you don’t have to go back in and take out. They stay in place for six months and then dissolve in the body. I’ve had a client that had five knee surgeries and can still play. We’re also covering these players off the field as well. I’m not going to sell anything where there might be any potential gaps in coverage. I’m just not willing to do that.

IJ:How has this insurance market evolved?

Lerner: The market 17 years ago wasn’t huge, but we had about a dozen or so companies that wrote this kind of insurance. Now, we’re down to less than half-a-dozen that are willing to do this kind of risk.

IJ:What do you have as goals for Total Planning in the coming years?

Lerner: I’m really comfortable in remaining small and providing personalized service to the athletes. That is the most important thing to me. It is important for me to have a personal as well as professional relationship with the players and their parents. One of the rewarding things is to see an athlete in their sophomore or their junior year and they get a policy and ask for your advice if they come back for their senior year. You help them make that decision and then when they go to the pros and play on Sundays and know you met that person, it makes it one of the greatest rewards.

For more information on Total Planning Sports Services, write: Keith Lerner, PO Box 147050, Gainesville, Fla., 32614-7050, call (352) 373-3000, or e-mail total_planning@hotmail.com

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