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New Trend: Insurance to Cover Injured Student Athletes’ Tuition

12 Nov, 2014

By: Tracey Schelmetic
Experts Debating Whether the Investment Is Worth It, Should Injuries Derail an Athletic Scholarship

High school students who get an athletic scholarship to college play in the face of a dark fear: an injury that causes them to lose that ride. If it does, parents are often stuck with footing the (usually sky-high) bill for tuition at a time they perhaps hadn’t been saving, full of confidence that their child’s education would be paid for by the scholarship. Worst-case scenario: lacking funding, the student has to drop out.

Enter the idea of tuition insurance for student athletes. A relatively new concept, it works like this: it’s a flat rate insurance plan that covers the cost of college tuition – usually up to about $200,000 for a four-year-program, though this figure could be adjusted for cost-of-living increases -- should a student athlete become injured and have scholarship offers withdrawn. While not all higher education institutions would pull a scholarship from an injured student – it would be a public relations nightmare – it has happened to some student athletes.

A company called Edgewood Partners Insurance Center (EPIC) recently announced the “soft launch” of an insurance product called Education Protector (EdPro for short), a policy being underwritten by AIG. It’s being tested in the marketplace in California to athletes as young as 16 who have received a verbal NCAA scholarship offer. According to a recent article in the Orange County Register, the insurance appears to be the next step in a progressively larger assortment of policies marketed toward amateur athletes.

According to EPIC’s Web site, the policy costs $749 annually ($1,400 for two years), and covers the time period between the extension of a verbal offer and the formal signing of the letter of intent or an athletic grant from an institution of higher learning.

The idea is similar to insurance policies that exist to cover loss of earning potential for college athletes who may suffer an injury during play and be unable to pursue professional careers.

But is it actually a good investment? Maybe not. Like all insurance, this operates on a worst-case-scenario basis, making it fear-based investing. It can be a prohibitive investment – since in EPIC’s case, payment in full is required up front. And perhaps the chances that the student will actually sustain an injury are slight at best.

It’s critical for parents opting for any type of disability insurance for student athletes to take a look at the fine print, according to NCAA spokesperson Meghan Durham, who told the Orange County Register that there is a strong trade-off between premium costs and benefits.

“We have found that there is disagreement in the industry about the value and benefit of loss of value insurance policies,” Durham told the Register. “If you review policies, the ones that offer the best coverage with the least amount of exclusions are more expensive, and those that are more affordable often times do not offer much coverage at all.”

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