Injuries to high profile athletes consistently make the headlines, including this year where potential Heisman candidates Nick Chub (University of Georgia) and Seth Russell (Baylor University) have both suffered season ending injuries. So how can a student-athlete protect themselves when an injury occurs? One of the first steps is understanding the insurance component of collegiate athletics.
The NCAA requires every student-athlete to have medical insurance to be allowed to participate. The policy can be held by the student-athlete, the parent(s), or provided by the university. While the NCAA does not mandate that the school pay for it, the majority of Division 1 programs cover their student-athletes. Each student-athlete should consult with their institution to verify such coverage is provided.
Two additional levels of insurance are available to student-athletes through the NCAA: (1) the Catastrophic Insurance Program and (2) the Exceptional Student-Athlete Disability Insurance Program. The Catastrophic Insurance Program provides coverage for an injury resulting in more than $90,000 worth of medical bills. In other words, it is not about the severity of the injury, but rather the costs. The student-athlete’s personal insurance would cover the first $90,000 in medical bills, with the Catastrophic Insurance Program covering anything above this amount. Student-athletes should be enrolled automatically when attending the university.
The Exceptional Student-Athlete Disability Insurance Program provides an eligible student-athlete protection against future loss of earnings as a professional athlete due to a disabling injury or sickness. A student-athlete participating in football would become eligible for this program if able to demonstrate the potential to be selected in the first three rounds of the upcoming NFL draft—not until after his second year of college. The program enables qualifying student-athletes, as approved by the program administrator, to purchase a disability insurance contract with pre-approved financing, if necessary. Under this program, the student-athlete would be obligated to repay the loan in full when any of the following occurs: (i) he signs a professional contract, (ii) the disability benefits become available due to a covered injury or sickness or (iii) the coverage is no longer in effect and the loan note matures. A 24-month maximum policy term is available for any underclassman eligible for the program.
Lastly, a student-athlete may also borrow against his or her future earnings potential to secure third-party disability insurance and loss-of-value insurance. Unlike traditional coverage, loss of value insurance does not require a career-ending injury before policy benefits are due. However, while loss of value insurance can provide broader coverage than traditional total disability insurance, it is also much harder to come by. Loss of value insurance currently is not available through the NCAA, so this coverage must be obtained from a private insurance carrier, subject to the oversight obligations set forth in Section 18.104.22.168.4 of the NCAA Manual.
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