NCAA Athlete Insurance Policies Are Keeping Players In School Longer

Despite popular belief, the NCAA does have a heart when it comes to the financial welfare of its student athletes.

The governing body provides support with payment for insurance premiums against potential debilitating injuries and loss of value in relation to the NFL draft. The support for the premiums, paid out of the NCAA’s Student Assistance Fund,  is enough to make unwanted agents go away at least temporarily.

Therein lays the most important aspect of the NCAA making it legal for conferences and member institutions to pay for premiums: Athletes and their families feel less of a need to cave in to offerings from agents or third-party interests.

Moreover, the athlete may decide to stay in school longer knowing his or her future is insured in case of a serious injury.

Former Texas A&M offensive lineman Cedric Ogbuehi stayed through his senior season and was selected as the No. 21 pick overall in the first round this year. He informed the New York Times that if Texas A&M did not buy his loss-of-value insurance – restoring likely future earnings that are lost to injury – he would have left school after his junior season for the draft.

It’s a win-win-win situation for college athletics with the athlete’s uninterrupted academics, further development on the field and impact on the team as an experienced veteran.

The NCAA, viewed mostly as the villain when it comes to student-athlete compensation, bucks that image by footing the bill for the insurance. Premiums can go as high as $100,000 depending on the size of the insurance policy. Practically all students and their parents can’t afford that amount or even a fraction thereof.  

The recent season-ending knee injury suffered by high-profile linebacker Myles Jack is an example of how the NCAA can alleviate the pain of his situation. By helping to pay the reported his premiums worth $40,000 to $50,000 last year, the NCAA assures Jack that if his injury affects his draft status, he could receive a reported $5 million from his insurance provider. Jack knows he can remain in a good financial standing despite the injury.

The same was true of Ogbuehi, who tore his anterior cruciate ligament in the Liberty Bowl last December. The injury likely dropped him 10 spots in the NFL draft, according to some analysts. That cost him a few million dollars, but Ogbuehi could not collect on his insurance because he was still a first-round choice. He is guaranteed $8 million over the four years of his contract with Cincinnati.

“He’s pleased with the outcome this year,” his agent Ryan Williams told the New York Times in regards to Ogbuehi staying in school instead of coming out early.

Texas A&M’s payment for the insurance premium put Ogbuehi in that accepting frame of mine.

Using the Student Assistance Fund,  respective schools in recent years have also paid the bill for disability insurance and loss-of-value insurance for players such as Braxton Miller, Marcus Mariota, Todd Gurley and Jameis Winston.

The questions to come of this: Aren’t these athletes getting preferential treatment by the NCAA? Isn’t it creating an elite status for highly-touted football players?

The fact is historically the funds have been used for a variety of student-athlete needs including travel expenses for family emergencies (including funerals), clothing, academic supplies and summer school fees. The NCAA’s most recent data indicates 87,000 student athletes received help through Student Assistance Fund in 2011-12.



There’s enough money to go around. The Big Ten reported that the beginning balance of its Student Assistance Fund increased from $7.67 million in 2012-13 to $9.8 million in 2014-15.

The NCAA distributes the Student Assistance Fund to conferences, which in turn divides the funds among its member institutions. A majority of the money reportedly comes from television contracts associated with the Division I Men’s Basketball Championship. 

Winds of change unfortunately started to swirl last October when the NCAA issued a waiver allowing student athletes to borrow against future earnings to pay for their own loss-of-value insurance.

Where will the “borrowing” come from in all cases? Does that open the door for an unsavory element? Does this mean the NCAA will eventually reduce its role helping athletes with insurance premiums?

The NCAA is not perceived as a giving organization. The Student Assistance Fund is its way of showing the opposite. Have a heart, NCAA, and keep it that way.

 

Feature image via The Tampa Bay Times, W. Vragovic