Unlike the majority of UK consumers, professional sportsmen and women are more prone to injury given the nature of their job. Peter Carvill assesses a niche area of the market.
It is somewhat foolish to talk about average or normal consumers in the protection market considering the wide deviations in the lifestyles, health and needs of customers. People are different, and each person requires unique attention from their IFA regarding their protection needs. Mitigating and influencing factors that affect individual cover are numerous with such things as age, income, perceived risk and medical history affecting the underwriting process at every stage.
But for the IFA who is asked to insure a sporting professional in case of injury, the task is made even more challenging due to the nature of the client's profession.
Unsurprisingly, given that the circumstances requiring this sort of cover are so specialised, there are few firms that deal with sports professionals, especially at the higher end of the market. Oval, SBJ, Windsor and THB Clowes were singled out as having developed reputations in the field.
Another firm, Hazlems Financial - a medium-sized IFA - deals largely with football players such as Stephen Appiah, formerly of Juventus but now playing for Fenerbahçe.
Harsh truths
Mark Hall, a paraplanner at Hazlems Financial, outlines the common situation for a young footballer signing his first professional contract. "When they're 18 and get a professional contract, we sit down with a player and say, 'right, if you cannot play football - you get injured, break your leg, end of your career - your income stops, simple as that'."
As to who takes on the cost of insuring a football player, Hall reveals that protection will often be a joint venture between the club and the player. "The club could well have something in his contract saying that it will pay for it, or he could pay for it himself. The club could say, 'we'll pay for a million pounds of cover', which probably wouldn't be enough so he'd pay for the extra amount."
Talking about how to start when advising a sporting professional, Paul Sandilands, director at Pulse Insurance, a firm specialising in finding cover for clients in non-standard circumstances, says: "As far as life cover is concerned, underwriters and insurers can have quite different views as to their value so we would start by establishing financial justification of the sum assured. We would go to the Lloyd's market for this type of unusual risk. The policy will be an annual one, paid for with a single premium and it will have to be re-underwritten each year."
future-proofing
Additionally, Sandilands says: "They should be able to obtain a personal accident policy that would cover death from an accident and total permanent disability. This cover would, most importantly, respond to career-ending injuries. When a sportsman retires from his career he should be able to obtain a life policy, to cover death from all causes. A GP report and medical examination are likely to be required before any cover is offered."
Different sports, however, carry different degrees of risk or injury; so, would premiums be affected by a person's choice of sport? Not always, according to Sandilands.
"Contact sports aren't always a problem. Footballers should be able to get the cover they require, but cricketers can have problems. They seem to be particularly susceptible to back difficulties and these may end their careers. The question for underwriters is, 'how likely is it that the sportsman will suffer an injury that will stop him playing again?' This will be a big factor in establishing the availability and cost of cover."
Hall disagrees, saying that due to the more physical nature of rugby, premiums would increase if someone attempted to make a career switch from, for example, football to rugby. "I'd imagine rugby would be more expensive than football simply because you get more injuries."
To obtain cover, Sandilands advocates a mixture of policies to augment the standard life cover. "A combination of life cover, covering death from natural causes only would be recommended. This would run alongside a personal accident policy, covering death or injury from an accident."
He adds: "Most sportsmen should be able to obtain life cover for death from natural causes, personal accident including career-ending injuries, income protection and travel cover." n
