Editor’s note: This article first published on October 20, 2005, and has been updated.

Some retired coaches may live modestly. They drive an older model car, and accept modest pay for articles and speeches.

See also: 17 unexpected expenses in retirement

But what of the Herculean men who are currently paid unbelievable sums of money to do what they have done since age five: the athletes?

They are highly talented people who have honed their craft to a degree of perfection that brings them to an immense price tag for their services, well into the millions for the top players. But what else are they suited to do in life once they can no longer perform their sport? Desks and chairs they do not fit. Speeches are not their forte. Brain surgery and arguing cases in court are not occupations for which they are normally prepared or care to pursue.

This presents special underwriting considerations.

See also: The advisor’s role in financial underwriting

Professional athletes may earn incredible sums, but whether age 19 or 39, they have to realize that the last paycheck may well be just that — their last paycheck!

This does not mean the athletes are paid on a game-by-game basis. They are contracted to play for the respective teams, usually on a multi-year basis. There are many variations in contract terms, but in general the contract stipulates the athlete is obligated to sustain performance standards lest he/she be placed on the disabled list or even be totally released by the team prior to the expiry of his/her contract.

The money the athlete is paid must be used to create a lifetime income. Even with experienced and sincere advice, this is a difficult task to accomplish. (See the chart for some of the considerations.)

The most serious peril for the person who chooses an athlete’s career is the aspect of being cut short by disablement. A diminution of eyesight or loss of hearing may not be a serious problem to acceptable performance in most occupations, but it may be a career-ending condition for an athlete.

Disability insurance to offset the great compensation he/she can earn is a vital coverage that, to reasonable people, would be an absolute need, without question or hesitation.

The recognition of these financial opportunities and challenges focuses attention on the high importance of insuring the athlete against the contingencies of getting sick or hurt and incurring a career-ending disability. Losing the ability to perform as contractually demanded is substantially different than is a broken leg or a heart attack to a coach or a front-office person.

The disablement may not last beyond the 10 days of sick leave granted to most employees. But, to a performing athlete, such a disablement could mean loss of future income and loss of financial independence.

An interesting challenge to underwriters is to adjust to a plan that does not work on the law of large numbers.

In this Aug. 14, 2014, file photo, Olympic swimmer Amy Van Dyken-Rouen gestures as she leaves Craig Hospital with her husband, Tom Rouen, left, in Englewood, Colo. That year, Van Dyken was injured in a severe ATV accident that severed her spinal cord, leaving her paralyzed from the waist down. (AP Photo/Brennan Linsley, File)

In this Aug. 14, 2014, file photo, Olympic swimmer Amy Van Dyken-Rouen gestures as she leaves Craig Hospital with her husband, Tom Rouen, left, in Englewood, Colo. That year, Van Dyken was injured in a severe ATV accident that severed her spinal cord, leaving her paralyzed from the waist down. (AP Photo/Brennan Linsley, File)

In a disability plan, where common occupations are insured, the underwriter attempts to insure thousands of persons with modest benefit limits. Professional athletes defy this plan design because:

      1. There are relatively few people who can perform the required skills; and
      2. The size of the benefits is immense because teams have few players of acceptable talents to fill their rosters.

The risks are high and abnormal. Skill and daring is required to bring forward a plan capable of handling the risk and the dimensions of the risk. Professional athletes are indeed fortunate to be able to obtain coverage to offset the loss of future earned income.

Uncommon risks can be easily handled by common brokers. It is worth knowing that the athlete is usually served by a broker whose practice is not limited to or honed to athletes only. This arena presents an interesting and profitable source of business for advisors, planners or brokers everywhere.

The athlete is a small part of the staff required to recruit, organize, train, equip, schedule and rehabilitate a team. Each team has many well-paid coaches. Specialties in rehab techniques are key to a team’s success. The physicians and dentists who are “team doctors” are very influential with players and staff. The business administrators are specialists who are well paid. Beyond the roster of players are many people who will be interested in insuring their future with disability income.

This expanded market is of sufficient size to provide purveyors with a profitable and interesting practice.

Athletes’ underwriting is specific and few facilities are capable of delivering the needed product. Specialists in the field of sports insurance make the task simple and profitable.

See also:

20 wealthiest U.S. Olympic athletes in Rio

8 facts to know about disability insurance [infographic]

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