Despite how fans see it, professional athletes are people too! Normal people with financial responsibilities just like the rest of us. So if you’re a pro athlete you may have a few questions in regards to life insurance. Can I get coverage? Do I need coverage? What kind of coverage should I get? Let’s address these questions and more.
In summary here’s what you need to know:
- You can get life insurance coverage at preferred rates.
- If you participate in hazardous sports you can get life insurance at good rates but with a flat extra. This is an extra fee per every $1,000 of coverage.
- The type and amount of coverage you need will depend on your goals and financial responsibilities. If you make over 7 figures you should consider cash value life insurance. These include either Whole Life or Universal Life insurance policies.
- You should always work with an experienced broker to attain the most favorable results.(InsureChance)
That’s the short of it. If you’re an athlete looking for coverage, feel free to contact us with any questions so we can guide you in the right direction. However, if you insist on learning more, let’s discuss the details.
Can I Get Coverage as a Professional Athlete?
The short answer is yes, but the life insurance companies will look at a few factors to determine your rate. For the most part, professional athletes can get coverage at great rates, but it will depend on these factors:
Type of Sport
The type of sport you participate in will play a big role. Most companies will easily insure professional athletes as long as it’s not a hazardous sport. Life insurance companies consider hazardous sports to be hand gliding, ballooning, motorized racing, parachuting, or scuba diving and anything else that has a high potential for danger. However, being in a hazardous sport doesn’t mean you can’t get coverage, it just means you will get a flat extra attached to your premium.
What is a flat extra?
A flat extra is a fee added on to your premium per thousand dollars of coverage. Depending on the sport and your frequency of participation, it can vary from $2 to $10 per thousand dollars of coverage. For example, let’s say your annual premium for $1,000,000 policy is $1,126. If your flat extra is $2, your annual premium will jump to $3,126.
The Build Issue
Life insurance companies have a build chart with certain height to weight ratios that put you in different health classes. Overweight people often get higher rates due to their high risk of health problems. With most athletes this can be cause for concern because while they may not be fat, they have huge amounts of muscle packed on, that on paper, can make them seem overweight. The good news is that most life insurance companies will be willing to play ball(pun intended) if you can demonstrate that you’re overweight for all the right reasons. If your chest exceeds your waist and you’re in overall great health you can qualify for good rates.
Other Factors
Other than that, the companies will look at the typical factors of the life insurance application. This will include health, driving history, criminal history, family history, and lifestyle. If you’re currently taking drugs or supplements to enhance your performance make sure to be open with your agent about this. The life insurance company will look at your medical records so it’s important for your agent to know any information that will help them put you with the right company.
What Type of Coverage Should I Get?
The type of coverage a professional athlete requires will depend on the need for coverage. You have a few options in types of coverage and coverage amount, which will mostly depend on income brackets.
Not all athletes start out with seven figure salaries. So if you you’re just starting out and have yet to crack the big time, you would follow the procedure most people would. In this case you would need to determine how much life insurance you need and what time period you would need it for.
In general you would want to be able to replace your income for a minimum of ten years. You would also want to make sure to calculate college education and any outstanding debt into the amount. For the most part a term life policy is the most affordable policy to cover temporary expenses like a mortgage and college education. For all permanent financial responsibilities a permanent life insurance policy would be your best bet. You can learn more about needs and coverage types by clicking on the resources below or getting in touch with us with any questions.
If you’re over the seven figure mark then your life insurance needs will be different from the average folks, however, that doesn’t mean that there isn’t a need there. At this point you’d have to ask yourself what you goals are with this coverage. Is it to help your family maintain the same lifestyle if something happens? Is it for a tax sheltered investment? To pay estate taxes? Or simply leave a legacy for charitable causes? For the most part I don’t recommend whole life insurance to the typical consumer but if you make over 7 figures then life insurance with an investment aspect is not a bad option for you. There are two types of life insurance policies that accumulate cash value:
- Universal Life– Permanent life insurance coverage that accumulates cash value on top of providing protection. This type of policy offers the most flexibility to the way the cash value is invested and to the changes you can make to the death benefit.
- Whole Life– Traditional type of permanent life insurance policy that provides a level payment with a cash value account that accumulates over time. It differs from universal life as it’s more costly and its cash value is invested more conservatively.
The one that’s best for you will depend on your goals.
Your Best Option
Life insurance can be confusing enough as it is. A lot of factors go into determining your eligibility and need for coverage. My advice is always to let a professional do the work for you and not try to navigate through this process yourself. As an independent agency we have the ability to do the shopping with over 60 A-rated life insurance companies to make sure we get you the best policy out there for your specific situation. We have covered many professional athletes over the years so feel free to call us at 888-491-1967 or send us a chat below with any questions or concerns. Welcome to InsureChance!
