MDRT member secures first-ever loss-of-value payout for active NFL player

UPDATE: This post won a 2019 EXCEL award for individual blog post. See all the winners (including another MDRT Blog item!) here.

It’s not often that something happens for the first time in the National Football League. You shouldn’t hold your breath for a record-breaking, single-game, nine-touchdown performance.

But recently something did happen for the first time: An active player collected on a loss-of-value rider, to the tune of $3 million.

The player is Philadelphia Eagles offensive lineman Chance Warmack, and the advisor who handled the policy is Ronnie L. Kaymore, a six-year MDRT member from Newark, New Jersey, whose clients are 100 percent professional and collegiate athletes. That this situation has never happened before despite the abundance of injuries in the NFL, Kaymore said, suggests that financial advisors may not be sufficiently educated about how insurance-related products can help this clientele.

“Working with athletes, the money managers always steer the ship,” he said. “The kids don’t understand that the guy who does your stocks and bonds doesn’t have to be doing your insurance.”

A first-round draft pick out of the University of Alabama and a starter for four years for the Tennessee Titans, Warmack, at Kaymore’s recommendation, put in place a loss-of-value rider on his disability policy. It meant that if he got injured and did not sign for at least $20 million in his next contract (which was expected to be more in the range of $35 million to $40 million), he would collect as much as $3 million. (This rider is especially valuable in football, where contract values are not guaranteed the same way as, say, professional basketball.)

That’s exactly what happened, as a torn tendon in his right middle finger caused Warmack to miss most of the 2016-2017 season and not have his fifth-year option exercised by the Titans, and history was made. (Kaymore also handled the first college athlete [Silas Redd] to collect on this type of policy).

It’s worth noting that loss-of-value riders do not protect against a decrease in skills; it does not provide a payout simply because someone does not receive the contract they think they deserve. Rather, it covers the common but rarely addressed loss of income that results from a non-career-ending injury.

“In the insurance world, it’s a basic disability policy with a rider,” Kaymore said. “In the sports world, it sounds so phenomenal because they’re not familiar with it.”

Well, they are now. ESPN reported Warmack collecting on his policy, and since then, numerous people in the sports world and beyond have called to let Kaymore know that their client, like Warmack was, is in the final year of a contract and wants to be covered with a loss-of-value rider.

Kaymore currently works with 40 active NFL players, 18 of whom he has worked with on loss-of-value policies. He has also handled this for 11 of the expected top 32 draft picks in the 2019 NFL draft and a handful of the projected top 10 2019 NBA draft picks.

Kaymore is glad that athletes are gaining awareness of the importance of insurance, rather than just investments.

“Athletes should take a team approach to their planning, with the team consisting of a family member advisor like mom or dad, the sports agent, the financial advisor, the CPA, the insurance advisor and the estate planning team or legal board,” he said. “The Golden State Warriors win championships because they have an awesome team, not just an awesome player like the Cleveland Cavaliers did.”

Read more about Kaymore’s experience working with athletes.

 

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