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Make sure you check with your insurer before you apply. Income protection policies generally can cover sports players but will exclude:
As much as we love sports, the reality is that they can impact our work life because of the injury risk they pose. Our research discovered the following:
Based on a February 2017 finder.com.au survey
Income protection insurance provides a monthly benefit of generally 75% of your average salary should you be unable to work because of a serious illness or injury. It provides the assistance you need to keep on top of your ongoing financial commitments, such as paying your rent or mortgage repayments, groceries, bills and other expenses. There are several factors you need to consider when choosing an income protection policy, one being the subject of this article – income protection for sports players.
It is important to note that your participation in certain types of sports and/or hazardous activities generally has an effect on your income protection application. If these activities increase your likelihood to claim, your insurance provider may place a special provision on your policy, in the form of a premium loading, exclusion or extended waiting period.
You may need to pay what's called a premium "loading". A premium loading is applied to reflect an increased risk of claim, which could either be a percentage of as much as 25% or a specified dollar amount for every thousand sum you wish to insure. So, if you participate in sporting activities that are considered to be high risk, you can expect to pay higher premium rates.
An exclusion is a restriction placed on a specific condition and/or event where a benefit will not be paid. If you have suffered an injury in the past from playing sport, your insurance provider takes into consideration the following:
If your insurer finds that it is likely you will suffer the same injury, an exclusion may be applied to your policy.
Your insurance provider may apply an extended waiting period instead of excluding injuries that are the result of sporting activities. As an example, if you have selected a 30-day waiting period, your insurance provider may offer you cover but with a waiting period of 90 days for any injuries sustained while participating in a particular sport. It is important to note that not all applicants are offered a special provision on their income protection policy just because they play sport or have suffered a sporting injury. Your insurance provider may offer standard terms or ordinary rates on your cover if your sports injury was very minor and had occurred a long time ago.
Workers compensation does not cover any injuries that occur outside of work. So, if you are injured as a result of sporting or leisure activities that you partake outside of work hours, you will not be eligible for any benefit payment under workers compensation.
John, 32, and Louise, 30, had just purchased their first home and they had to pay closer attention to their monthly budgeting to keep on top of the mortgage repayments and daily living expenses. John, a landscaper, enjoyed spending some of his Sundays dirt biking near his friend's property, a couple of hours drive from his home. While riding one morning, John hit a small jump with too much speed and cleared the down ramp landing on flat ground, fracturing his spine. This injury forced John to take 3 months off work and undergo rehabilitation twice a week. With no income protection plan in place, John received no income over the 3-month period and since he was self-employed, he was not entitled to sick leave pay. He was forced to borrow money from his older brother just to keep on top of the rehabilitation fees, mortgage repayments, school fees and other day-to-day expenses.
* This is a fictional, but realistic, example.
Generally, the chance of injury determines how much more it costs to insure you for participating in certain sports, as well as how severe injuries will tend to be. Motorsports, for example, tend to have very severe injuries, although they may occur less frequently than in other sports, while football might have a significantly higher chance of injury, but they might generally be less severe. As such, there are different ways of defining "dangerous" in sports. To get an idea of how sports impact life insurance premiums, you might look at the following:
The nature of the injury has a significant effect on how likely it is to result in you needing to make an income protection claim. Injuries that heal faster or tend not to result in disability will generally not lead to income protection claims, while those that do not affect your ability to work are generally not claimable either.
Read more about how income protection for non-professional football players works.
| Type of sport | % | Total number of cases in 2011-12 |
|---|---|---|
| Australian rules football | 8.8 | 3,186 |
| Soccer | 8.2 | 2,962 |
| Cycling | 8 | 2,917 |
| Football, other and unspecified | 7.8 | 2,821 |
| Wheeled motorsports | 7.6 | 2,737 |
| Water sports | 6.9 | 2,502 |
| Rugby, unspecified | 4.6 | 1,650 |
| Roller sports | 4.5 | 1,632 |
| Equestrian activities | 4.3 | 1,568 |
| Basketball | 3.6 | 1,322 |
| Netball | 3.5 | 1,262 |
| Ice and snow sports | 3.1 | 1,114 |
| Cricket | 2.5 | 913 |
| Walking and running | 2.4 | 878 |
| Rugby league | 2 | 709 |
| Racquet sports | 1.9 | 687 |
| Touch football | 1.8 | 644 |
| Combative sports | 1.7 | 602 |
| Fishing | 1.4 | 525 |
| Dancing | 1.4 | 517 |
| Hockey | 1.2 | 442 |
| Adventure and extreme sports | 0.9 | 335 |
| Rugby union | 0.7 | 262 |
| Golf | 0.7 | 251 |
| Gymnastics and trampolining | 0.3 | 121 |
| Other and unspecified sports | 10.1 | 3,678 |
Source: Australian sports injury hospitalisations 2011–12 report, Australian Institute of Health and Welfare.
Knee and lower leg injuries are the most common location of injury for most sports, with fractures generally being the most common type. In the case of rugby union, skull fractures as a result of contact with another player were the most common cause of hospitalisation. Depending on your occupation, different types of injury will have different impacts on your ability to work. It can be worth considering this. For example, if your job specifically requires walking or running then knee or leg injuries may be a significant risk.
Source: Australian sports injury hospitalisations 2011–12 report, Australian Institute of Health and Welfare.
The following table is a sample of the special acceptance terms that may be required for different sports. Rugby league, rugby union, Aussie rules, soccer and touch football will be used as points of reference.
| Insurance provider | Football – rugby league, rugby union, Aussie rules/AFL (amateur) | Football – rugby league, rugby union, Aussie rules/AFL (semi-professional) |
|---|---|---|
| Insurer 1 | ||
| Insurer 2 | Standard rates | Cover may be offered based on your individual case |
| Insurer 3 | Acceptance term – 25% premium loading or 90-day exclusion period |
| Insurance provider | Soccer (amateur) | Soccer (semi-professional) |
|---|---|---|
| Insurer 1 | Acceptance term – 30-day extended waiting period (recreational only), or 25% premium loading or 90-day extended waiting period (recreational with participation in competition) | |
| Insurer 2 | Standard rates | Limited cover may be considered |
| Insurer 3 | Standard rates | Cover may be offered with additional loading |
Please note that this information is not indicative of an actual policy and is to be used as a rough guide. It's a good idea to get in touch with your insurer for specific details.
A professional sportsperson is someone who supports themselves or their family primarily by playing sports, or otherwise makes most of their income from playing sports.
Your sporting institution will often have some form of insurance cover, but this may not include full income protection benefits for you.
While standard income protection insurance policies might not cover you in the event of sports injuries, specialist insurers might be able to offer cover where standard providers will not. Your cover can take the form of a personal accident policy, or a general combined life insurance policy that's specially tailored for professional athletes.
Most Australian insurance providers do not offer income protection cover for professional football players or professional sports players of any kind. However, a small number of providers may consider application for cover on an individual basis. It may be best to obtain more information from your sporting association and find out whether they have a national insurance scheme agreement in place that provides cover in case of an injury.
If you participate in sports that are considered to be hazardous, specific terms (loading or exclusion) may be applied to your policy or in some circumstances, your application for income protection cover may be denied altogether. The terms and conditions may also vary depending on whether your engagement in this sport is purely recreational or on a competitive basis. Some sporting activities that may be considered as high risk include:
Yes, and it is crucial that you provide information to your insurance provider if you are playing a sport of any kind, either on a recreational or competitive basis. Almost all income protection application forms specifically ask whether or not you currently participate or intend to participate in any sports, including those that are considered to be hazardous.
James was an executive who played rugby union every weekend, and tried to get to training sessions at least once a week when he could. He wasn't a professional by any means, but still played fairly competitively and had seen a couple of broken bones on the field in his time. Looking at income protection insurance policies, he was surprised at the difference playing rugby made to his premiums. He wasn't willing to give up rugby, but wasn't keen on paying that much for insurance either. He didn't want to exclude sports cover from his income protection policy either, because he wanted to be able to play with full confidence. As such, he started looking into whether his club membership included any insurance in the cost of registration. It did, and in fact offered a personal accident policy that included benefits such as cover of non-Medicare expenses, lump sum benefits in the event of death or serious injury and weekly income protection.
It covered him during matches, as well as while training and travelling to or from matches and training. The only catch was that the income protection benefits through his club insurance had a limit of $300 per week. This was significantly less than the 75% of his income he would have been able to claim through a standalone income protection insurance policy. James did some more digging, and eventually found an insurer that let him take out his own personal accident sports insurance policy. It delivered similar benefits to his club cover, but instead offered a much higher income protection limit of a full 75% of his typical earnings.
* This is a fictional, but realistic, example.
Some sports are considered very high risk by insurance companies which can impact your ability to take out life insurance.
If you regularly participate in a sport considered extreme or high risk, your insurer may apply one of the following to your policy:
Applicants who participate in sports that are considered to carry a certain degree of risk may be offered income protection cover with specific terms and conditions in place. The terms and conditions offered may vary depending on:
It is important to have a clear understanding of any special terms that may be offered by your insurance provider in relation to your sporting activities, as this effects whether or not you can claim. If you provide inaccurate information, you are breaching your duty of disclosure and your provider may cancel your policy.
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References
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