Even Athletes Need Disability Insurance
Many physicians have long been aware of the need to buy disability insurance to protect their income from a disabling injury, but physicians are not the only group needing high-dollar insurance policies. Everyone is at risk of a disabling injury. According to statistics, one-third of all Americans between ages 35 and 65 will become disabled for more than ninety days. Athletes are no exception to the norm, though we usually don’t think of Tiger Woods or Alex Rodriguez as owning disability insurance. For the wealthiest athletes, who can earn a living off of endorsements or other business ventures, disability insurance is probably unnecessary. But for most, it is an often-overlooked yet vitally important safety net.
Consider the June 2003 motorcycle crash of Jay Williams, a promising 2002 NBA draftee who suddenly found himself with a mangled leg, hundreds of thousands of dollars in medical expenses, and, because of a certain motorcycle-riding clause in his contract, suddenly out of a salary. The Chicago Bulls charitably bought out Williams for $3 million, but eight years later, he remains unable to return to the game.
Professional athletes all too commonly fail to realize that disability insurance protects their income as much as it protects the income of a doctor or attorney. It’s no surprise that a recent article suggested disability insurance as one of the first things a new professional athlete should buy. Some prepare even before they turn pro: Shaquille O’Neal played at Louisiana State University while covered under a $2.7 million dollar policy. In fact, one of the NCAA’s lesser known programs is its group disability insurance through which exceptional student-athletes can purchase protection against disabling injuries or sickness. Each year, about 75 top athletes buy insurance through the NCAA program.
There are more similarities than differences between the NCAA’s disability insurance policy and physicians’ disability insurance policies. The NCAA caps its benefits at a maximum of $5 million for first-round NFL draft picks and men’s basketball players, a figure roughly equivalent to the lifetime earnings of many physicians (though the NCAA pays the entire benefit over a fixed 30-month period). And like physicians’ policies, the key question is what constitutes a disability?
We have previously blogged about the importance of understanding the definitions of disability in a physician’s insurance policy. Most physicians purchase “own-occupation” policies which provide compensation if the insured is unable to perform the particular duties of his or her occupation (as compared to an “any occupation” policy which requires that the insured be unable to work in any occupation). “Disability” may be defined as being unable to perform every duty of the insured’s occupation, or it may mean being unable to perform the “substantial and material” duties of the occupation.
The NCAA policy uses these same definitions, only rewritten in the context of professional sports. It requires that several criteria be satisfied to consider an athlete disabled; these include having a disability resulting from an injury or sickness, being under the regular care of a qualified physician, being unable to engage in sporting activity at the professional level, and the total disability preventing the athlete from signing any employment contract with any professional team as a professional athlete in the athlete’s sport.
The NCAA policy thus resembles a physician’s own-occupation policy in that it pays out if the athlete is unable to “go pro,” regardless of whether he or she is able to work in a non-professional athletic capacity. To those who remember Michael Jordan’s foray into baseball, note that the clause requiring that the athlete be unable to engage in sporting activity at the pro level seemingly precludes an athlete from being disabled from say, basketball, while signing an MLB contract.
Other similarities between the policies are more obvious. To be considered disabled, both typically require that the insured be receiving regular care from a qualified physician and that there is an inability to perform the duties of the insured’s occupation. One difference, not as much in language as in measurement, is the condition on “being unable to engage in sporting activity at the professional level”—an easier to measure standard than a physician being unable to perform the substantial and material duties of his or her occupation.
Aside from bringing their “A game” to work each day, what else do physicians and athletes have in common? At the beginning of their careers, they both should ensure that they understand the different types of disability insurance policies and how they can protect themselves and their loved ones. If they need to consider filing a claim, it is important to hire an attorney specializing in disability law to protect their rights.
