Texas A&M Paying Tab for Ifedi’s Loss of Value Insurance

Finance, Football

Schools pick up tab for insuranceLast year, Texas A&M discovered a new use of the Student Assistance Fund, a pool of money created out of revenue from the NCAA men’s basketball tournament and earmarked for student athletes with financial need. The fund has typically been used for expenses like trips home and clothing, but Texas A&M asked for a clarification last year regarding the insurance needs of student athletes and sparked a bit of a new trend when it spent $50,000-60,000 on a loss-of-value insurance policy for Cedric Ogbuehi.

Although disability insurance has been around for student athletes for quite some time, loss-of-value insurance is a newer phenomenon. Loss-of-value insurance pays out if a student athlete falls precipitously in the NFL draft due to an injury.

I wrote an in-depth piece for SportsBusiness Journal last year on this growing trend – which schools have purchased the policies, whether there’s any danger of depleting the SAF through the purchase of these policies and more – that you can read here (they’ve made it public, so you should be able to read even without a subscription).

Now Texas A&M is in the news again, with CBS Sports’ Dennis Dodd reporting the Aggies have purchased a loss-of-value policy for redshirt junior offensive tackle Germain Ifedi.

There are few cases of these policies paying out for student athletes, although former USC student athlete Marquis Lee is currently embroiled in a legal battle with Lloyd’s of London over his policy and the injury that led him to drop in the 2014 NFL Draft.

Want to learn more about loss-of-value insurance and how the SAF has been used previously to purchase policies, please read my article for SportsBusiness Journal.

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