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November 24, 2016 at 07:00 AM
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.
