As a professional athlete, life insurance companies look at what sport you play and what factors might lead to additional health concerns. There are certain sports that are significantly more strenuous and there are sports that are more dangerous.
Life insurance companies need to know what risk you pose financially and part of that involves investigating how easily you might be injured with the sports you play.
Why is it Hard for Professional Athletes to Get Insurance?
It can be difficult to get life insurance as a professional athlete because life insurance companies will choose not to approve policies to applicants who have dangerous careers and if they do, the cost is very high. You have to understand that a life insurance company is just that, it’s a company. In order to pay out on life insurance claims when somebody passes away, the company needs to be financially stable.
When companies evaluate the premiums you pay for life insurance, they do so based on the length of the policy you are getting or the type, your age, and how healthy you are, in conjunction with your career.
Professional athletes are not the only ones subject to difficulty obtaining life insurance. Other dangerous careers such as pilot or truck drivers, even commercial construction workers will find it just as difficult to get reasonable insurance.
Companies need to know approximately how long you are going to live based on the factors mentioned above because that is what helps them to calculate how long you will pay into the policy which, in turn, helps them calculate how much you would have to pay for your policy in order for you to hopefully pay off the entire death benefit if not more than the death benefit by the time you pass away.
Despite all this, professional athletes can still find affordable life insurance coverage for their families and loved ones.
Factors That Life Insurance Companies Check for in Professional Athletes
Whether you play as part of a student-athlete team just for fun or you are a professional athlete with your picture on the cover of ESPN magazine, life insurance is going to be difficult for you to get. The life of an athlete is one full of risks.
Life insurance is a great way to replace income for those whose main income might come from their athletic abilities.
As a student-athlete you might not need this as much but you could still invest in life insurance to cover all of your other costs. The approval you receive and the cost you are facing is going to hinge on your current health, your health history, your current lifestyle, and of course the sport to play. Life insurance companies check many things including the following:
Life insurance companies want to know whether you play college football or you are a pro athlete. They need to know if the sport you play brings with it significant risks. With regard to the sport you play, life insurance companies need to know whether you participate in a sport with heavy contact or none.
If you play for recreational purposes in no contact sports you’re going to obtain much more affordable premiums compared to someone that is a professional athlete engaging in extreme sports with a high risk of danger.
How Travel Impacts Risk Level and Rates
If you are on a golf team, which is an otherwise safe sport, the level of competition at which you play is going to impact the cost of your life insurance coverage because you might have to travel a lot for competitions. There are risks associated with not just the travel but the countries to which you travel. The same is true of anyone who is a top-tier professional athlete.
How Physical Play Impacts Risk and Rates
You could be a professional athlete whose entire income is taken from your sport and if you play football you might not travel to dangerous cities but the sport itself has a heavy level of competition physically. Conversely, you could be a professional golfer who travels all around the world to some areas that might not be safe. These are all things that need to be taken into consideration.
How Supplements Impact Life Insurance Rates
You must disclose whether you are taking supplements. This does not just mean illegal steroids, it means perfectly legal supplements. There are many performance-enhancing drugs all around the world and even the most modern of supplements might be considered a risk to life insurance companies.
Again, there are some supplements which might be approved by industry leaders or by the governing body for your sport and sold at stores but if you hide it from the life insurance company, it does not reflect well upon you. Everything you take whether it is a mineral, a powder, a vitamin, or a gel supplement needs to be disclosed.
Things you need to disclose when taking supplements:
When you are disclosing these things try and come at it from a place of teaching. You are teaching the underwriting individual and the life insurance company what each item is, what it’s for, how much you take, and how long you’ve taken it. They probably don’t know as much about the different supplements on the market as you do especially if you have been taking them for years. So just be honest and explain the things that they need to know.
You must be cognizant of the fact that sometimes the supplements you take which are perfectly modern and legal could heightened levels in your blood for certain things like protein or glutamines. This might be perfectly legitimate but you have to understand that most life insurance companies might flag this because these levels can show up on tests as false positives for other diseases.
How Health Impacts Life Insurance Rates
If you don’t have those diseases and the underwriter or agent finds a heightened level in your blood they might see this as a red flag and deny you coverage. You need to make sure that you stay ahead of any false positives. You also need to know that some supplements which are perfectly legal and approved by whatever sport you are playing might still be damaging your body in some way.
Life insurance might give you some wiggle room here but certain types of detox or purity diet might hurt you when you go to get life insurance because they do have negative ramifications on the body which could reflect poorly on your overall health. And again, health is a very critical factor in determining the rates that you pay for your insurance.
Not everything is about your job. It’s also about your health. Life insurance companies need to know what your current body mass index is. Understand that there are plenty of professional athletes who still have a very bad body mass index. If you’ve ever seen the lineup for a football team you know this is true.
Remember that somebody who weighs 200 lb might be incredibly fit, they could be a professional bodybuilder but they could also be somebody who sits at home and binge watches Netflix. These two individuals could have the same body mass index based on numbers alone. So if you have a BMI that is outside the normal range the life insurance company is going to need to further evaluate your general health.
Which Life Insurance Policies are Best for Professional Athletes?
The best type of life insurance for you really depends on a few major factors:
There are two main types of life insurance:
Term Life Insurance
Term life insurance offers coverage for a specific period of time between 10 and 30 years. This type of life insurance expires once the life of the policy is over, and is usually only offered through age 75 by most companies. There are fewer policy riders than permanent life insurance policies, but the premiums are cheaper as well. Term life policies can be converted into permanent life policies with the right rider (if offered by the company) which can be a helpful tool for someone who is not sure what type of coverage they need.
For professional athletes who already have financial planning worked out, and have a definitive plan for retirement and accumulating cash value through various investment vehicles over their life, this is the recommended type of life insurance coverage.
This way, you are only paying for the benefits of life insurance rather than for the cash value accumulation that comes with permanent life insurance. The only downside to this type of life insurance is that you will not secure coverage for life. However, the conversion term rider allows you to convert a term life insurance policy to a permanent policy before the term is up. This rider is relatively inexpensive and is offered by most companies for free with term life policies.
Permanent Life Insurance
Permanent life insurance provides coverage for life or until the maximum policy age (usually 95, 101, 112, or 121). These type of life insurance policies accumulate cash value over time. This cash value can be borrowed against on a tax-free basis. Depending on the type of permanent life insurance you choose, your cash value accumulation will work differently.
Overall, for professional athletes, the cost of life insurance is likely not a problem you will face in the application process. More likely, you will be trying to find the best type of life insurance that fit your financial goals and coverage needs for the future.
For this reason, we highly recommend permanent life insurance policies for professional athletes, especially for those who have not given much thought to retirement and investing throughout their careers and life after their sport. The cash value you accumulate throughout the life of your policy can be used as a retirement fund later in life.
Furthermore, you can tailor your permanent life insurance policy to grow cash value based on the level of risk you are willing to take. Some policies offer fast cash value accumulation, while others offer slower but steadier and even guaranteed rates of cash value accumulation over time.
Permanent life insurance policies are also a great way to build an estate and leave a legacy for your family once you are gone. Chances are, as a professional athlete, you may have real estate and other large assets that you want to be able to protect and pass along to your children and family in the event of your death. Permanent life insurance can help you to plan for this and distribute your assets to your family safely in the event of your death.
Specific Life Insurance Policies for Professional Athletes
As a professional athlete, there are also certain high risks associated with job security. Contracts change, interests change, and there is a very high level of competition surrounding people who are looking to take your position on a team.
As a result, these are some very specific types of life insurance policies we also recommend for professional athletes:
|Loss of Future Earnings||As a professional athlete, you probably have a limited amount of time that you can play your sport. A disability might negatively impact the amount of money you can earn in the future and significantly shorten your career. If you have no income beyond the present contract you have as an athlete you can use this feature to provide income if you are disabled and your career is shortened as a result.|
|Contract Completion||This feature is one that alleviates the financial burden that you would face if you were disabled and your team had to continue to pay you as a non-performing athlete.|
|Loss of Endorsements||As a professional athlete, you probably get a great deal of income from your endorsements but even something as minimal as a political statement or a public relations problem relating to an injury might cause your sponsors to pull back and this type of income loss can be mitigated with this feature.|
|Temporary Total Disability||In the event that you are temporarily unable to work because of a disability or an accidental injury or even sickness, this type of feature gives you protection. The benefit can range in duration from 60 days upwards of 5 years depending on the insurance company you choose.|
|College Draft Protection||Trained athletes who choose to stay in school instead of entering into the draft might risk a career-ending disability while they are still in college and this type of plan is designed to protect that.|
|High-Limit Death and Dismemberment Benefits||Losing your life or becoming dismembered because of your sport can place an enormous Financial strain on your surviving spouse or your family. This type of plan provides you as an athlete with a high limit that eliminates the financial burden you might face in your loved ones might face as a result of this tragedy.|
How Much Does Life Insurance for Professional Athletes Cost?
If you participate in hazardous Sports there is typically a flat extra fee for every $1,000 worth of coverage.
They will ask about injuries, medications you are on, surgeries you have had, all of which will be specific to each part of the body and each extremity.
Overall, while life insurance for professional athletes is generally more expensive than it is for most people, this extra cost incurred because of the risk of your profession is offset a bit by the fact that you usually must be very healthy in order to be a professional athlete.
While we cannot guarantee that these are the prices all athletes can expect to pay for life insurance, these are the monthly life insurance rates for someone who is in excellent health.
|Age||Policy Type||$500,000 Male||$500,000 Female||$1,000,000 Male||$1,000,000 Female||$2,000,000 Male||$2,000,000 Female|
|20||10 Year Term||$13||$12||$21||$18||$36||$29|
|20||20 Year Term||$19||$16||$33||$27||$61||$50|
|20||30 Year Term||$30||$22||$51||$40||$98||$76|
|25||10 Year Term||$13||$12||$21||$18||$36||$29|
|25||20 Year Term||$19||$16||$33||$27||$62||$50|
|25||30 Year Term||$31||$24||$52||$42||$98||$79|
|30||10 Year Term||$13||$12||$20||$18||$36||$30|
|30||20 Year Term||$20||$17||$34||$29||$63||$52|
|30||30 Year Term||$34||$28||$60||$50||$114||$76|
|35||10 Year Term||$14||$13||$22||$20||$39||$34|
|35||20 Year Term||$22||$19||$39||$33||$71||$60|
|35||30 Year Term||$39||$33||$70||$59||$133||$112|
|40||10 Year Term||$19||$17||$30||$28||$56||$50|
|40||20 Year Term||$31||$27||$58||$47||$111||$90|
|40||30 Year Term||$58||$45||$108||$85||$208||$166|
For most professional athletes, a $1,000,000 or even $2,000,000 is likely not enough coverage. Typically, life insurance policies above the $2,000,000 are only offered in permanent policies, but that is not to say term life insurance options do not exist out there.
No need to worry, life insurance policies are offered for $10,000,000 and higher! On top of that, you can have multiple life insurance policies at one time to make sure that you have coverage throughout the various stages of your life and in the amount you desire.
Best Life Insurance Companies for Professional Athletes
There are different companies that provide insurance policy specifically for professional athletes. Below are a few of the top life insurance companies for professional athletes:
These, however, are just a few of the many options on the market for athlete life insurance.
The best thing you can do when it comes to looking for life insurance as a pro athlete is by speaking with an independent life insurance agent who can help you compare the best coverage options from a multitude of companies on the market.
Our independent agents work with some of the best life insurance companies on the market to help our clients find the best coverage for their situation. If you are a pro athlete looking for life insurance coverage, give us a call to work with an agent who can help you compare all of your options to find the best life insurance coverage for you and your loved ones.