Insuring Professional Athletes
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Narrator: Keith Lerner is a renowned expert in insuring both college and professional athletes. For the past twenty years his company Total Planning Sports Services has given athletes peace of mind and financial security should they suffer a career ending injury. The National Basketball Association’s (NBA) current lockout has many players and recent draft picks considering other options. ILSTV caught up with Keith in his Gainesville, Georgia office and asked him how his company can help the players protect themselves should they decide to play elsewhere.
Keith Lerner: Okay, I can give you a couple of examples. The first would be a college player who was recently drafted in this past June’s recent NBA draft, who does not have a contract due to the lockout currently, but was picked in the first round. And that gentleman might playing or practicing currently, or playing in professional pick-up games so-to-speak, and wants to still have protection until he does sign a professional contract; because right now he does not have any contract guarantees. So the insurance is basically in place so that if he does get hurt before he signs that contract, he can collect a lump sum of money.
The other side of the issue is the players that are currently in the NBA (that) have contracts and are deciding to play in other leagues and other places. If they are in the tail end or last year their contract they might want to have protection because they don’t have the guarantees beyond this one NBA year. And they want to protect themselves prior to doing this next NBA contract, so they have coverage from two years from how, three years from now, or four years from now.
Narrator: Often professional teams will write some guarantees into players’ contracts, but players can find themselves in financial trouble if they are injured doing something they should not be doing. Keith explains
Keith Lerner: Typically there are some dos and don’ts for professional athletes and if they have it in their contract, they can come to us and obtain coverage so they have all the perils covered and not just what the teams wants to cover so-to-speak. Where if they get hurt on the court they might have some insurance guarantees from the team but if they are out rollerblading and riding a motorcycle they might not have any coverage at all, we can step in and provide that extra coverage as well, so if they are doing something excluded by their club contract, we can pick up that coverage.
Narrator: Aside from the professional market, Keith has worked extensively with many college athletes.
Keith: In the college market the polices are to protect against a career ending injury before they have any money, before the college athlete obviously has any money. They are allowed to buy a policy. They have to be projected and based on where they’re projected (in the draft) that determines the amount of insurance they can get. So therefore if a gentleman is projected to be picked in the first round, that might translate to a 10 to 15 million dollar policy. And if a player is projected for the second round there’s a certain amount of value associated with that. And the third round and so on an so forth.
Narrator: And what is the typical cost of these types of policies?
Keith Lerner: That’s going to be sports specific and age specific. So for example, football and hockey are the most expensive and then basketball and then baseball, and golf would be pretty inexpensive. A college football player for a million dollars in coverage is looking is typically looking in the neighborhood of seven to eight thousand dollars for a one year policy on a million dollars.
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