DOES THIS SOUND LIKE YOU?
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Does This Sound Like You?
As a professional athlete, you might sign that first deal and think you have the world in the palm of your hand. This is your opportunity to live the life you always dreamed of, provide for your loved ones and retire early. Not so fast, though. Sure, you might sign a contract that seems lucrative, but money is a resource, and a limited one at that. In fact, 78%_of professional athletes go broke within just three years of their retirement.
Of course, some of those athletes may have had good intentions with their money, paying back those who stood by them through the tough times, but it's also important to remember that your money is meant to last throughout your entire life. Furthermore, very few athletes stick around to play for Longer than their first contract, whether that's due to injury or the simple nature of sports, Still, however, you need a plan. A plan that puts you first and builds a solid financial foundation meant to withstand the test of time. Let's go over one way we can help athletes protect their earrings, even when their careers don't go as intended.
Please remember, the example for "Jonathan" below Is purely hypothetical, Recommendations and products may vary based on needs, circumstances, goals and more. Please contact us for additional information and actual recommendations based on your individual situation, Each insurance contract contains various features and terms spelled out by the insurance company providing the policy, and we can help you compare between many companies and many types of contracts. Guarantees may even be offered based on the financial strength of the insurance carrier
The Situation
Jonathan is a 22-year-old football prospect with high aspirations and an even higher vertical jump. He grew up without means, but it's all set to change when he enters the National Football League. Obviously, as all football players do, he dreams of having a long career, giving him the opportunity to sign a few long-term contracts with substantial payouts and guaranteed money. He does, however, know the average length of an NFL career is a little over three years. He also recognizes that he'll have the potential to earn a great income, but he may have to sacrifice his body to do so over the course of his career, which he hopes lasts a decade or longer. How can he protect his earnings if his tenure in the NFL happens to be cut short?
Calling an Audible
Jonathan sees into the future and realizes he doesn't want to be like the nearly four-in-five athletes who run out of money immediately after retiring. He decides to prepare by consulting an advisor with access to protective products, some of which are specifically designed with football players like Jonathan in mind. His advisor introduces him to a permanent life Insurance policy with a cash value portion and an accelerated death benefit rider for traumatic brain injuries. The advisor also shows Jonathan a recent study showing more than 90% of NFL players suffered from CTE, or chronic traumatic encephalopathy
Without including the potential of bonuses or signing higher contracts, a rookie in the NFL earns a minimum of $750,000 before tax. Jonathan discusses his potential needs with his advisor Then, he purchases the policy, locking him in to pay $29,685 in premiums each year for ten years with a $1 million accelerated death benefit if he utilizes his rider. That means by year ten. he will have paid $296,850 into his policy. Let's say Jonathan's career goes as planned and lasts for 10 years before he retires. If he's then diagnosed with a traumatic brain injury by his doctor, he can exercise his accelerated death benefit rider for critical injury to immediately receive a $1 million lump sum payment from the insurance company.
Granted, you can't put a price on mental health, so let's say Jonathan still has a lengthy career and retires after ten years, never incurring a concussion or traumatic brain injury. He can continue to fund the policy if he'd like, growing the cash value portion, but he can also choose to stop paying his premiums. If he chooses the latter, his cash value portion could grow to nearly $850,000 by the time he's 65, all of which would be accessible as tax-free income for the rest of Jonathan's life. Either way, Jonathan's policy could provide for him long after his football career. This could be even more helpful if he doesn't place other earnings into saving or investing vehicles.
Conclusion
This policy protects Jonathan in many different scenarios. First, if Jonathan has a lengthy football career and never suffers a traumatic brain injury, he can keep the policy in force and access the cash value portion for any reason he needs, including retirement income. If he plays for 10 years and does happen to suffer a brain injury, he can consult his doctor and use his accelerated death benefit rider for a lump sum payment of $1 million.
It even functions similarly if his career is cut short. He can still keep his policy in force for, at maximum, just over a third of one year's salary, providing him with retirement income and a death benefit, or he can still use his rider to claim his accelerated death benefit if he suffers a brain injury. Without this policy, he's only protected by his earnings, and his future will be determined by how he leverages them, potentially leaving him exposed to risk or the potential of running out of money like nearly 80% of his fellow athletes,
Jonathan isn't alone, Thousands of athletes go pro each year without a financial consultant or a trusted source of financial information.
If you're ready to set up a protection plan to avoid running out of money like four-in-five athletes, give us a call today at (303) 940-8440, or click below to book an appointment
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