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Kaepernick disability policy creates bizarre gap in coverage

Kaepernick AP

As much as the 49ers and Colin Kaepernick may try to characterize his new contract as something that applies only to the 49ers and Kaepernick, other teams hope to apply multiple aspects of the Kaepernick contract to their own quarterbacks.

Per a source with knowledge of the discussions, the Kaepernick contract had a strong influence on the Dalton talks.  Which shouldn’t be a surprise, given that owner Mike Brown publicly declared that the Kaepernick structure should be applied to Dalton’s deal.

One specific term created significant consternation, prompting Dalton ultimately to decide not to pursue money guaranteed in the event of a catastrophic injury.  To offset his own injury-only guarantees, Kaepernick agreed to buy a $20 million disability policy payable to the team and costing roughly $2 million in pre-tax salary.

And here’s where it gets even weirder.  A source with knowledge of the Kaepernick contract and insurance policy tells PFT that, while the 49er aren’t required to pay Kaepernick’s injury-only guaranteed money for a career-ending injury suffered away from football, the 49ers get the $20 million if Kaepernick suffers a career-ending injury anywhere, at any time.

For that reason (and many others), it makes far more sense to pass on the injury-only guaranteed money and to buy a disability policy with benefits payable not to the team but to the player who is paying the premium.

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55 Responses to “Kaepernick disability policy creates bizarre gap in coverage”
  1. ctiggs says: Aug 5, 2014 10:08 AM

    Future HOF #GoNiners #Nobodyhasitbetter #KapwillgetusSixthisYear

  2. redandgoldhitman52 says: Aug 5, 2014 10:10 AM

    Kaep will hoist the lombardi trophy this year

  3. whoopingchow says: Aug 5, 2014 10:12 AM

    This almost sounds as exploitative as college athletics.

  4. spin5150bc says: Aug 5, 2014 10:14 AM

    As a player, why the hell would you agree to that? Particularly when you are a QB that could simply walk up to about 28 of the 32 teams and get a starting gig right away.
    Sounds like Kap needs a new agent…

  5. thestrategyexpert says: Aug 5, 2014 10:18 AM

    It would be nice if the NFL or the NFLPA made efforts to teach these players how to properly use insurance to protect their money and solve their financial problems. I have never heard a player yet talk about their brilliant insurance strategy, so either the ones that have such a plan are keeping it a secret, or they have no clue how this stuff works.

  6. jbcommonsense says: Aug 5, 2014 10:19 AM

    Bizarre. Why did Kaepernick’s agent agree to that?

  7. dfields4 says: Aug 5, 2014 10:22 AM

    Kaep isn’t the brightest bulb in the toolbox…

  8. juliusanonymous says: Aug 5, 2014 10:23 AM

    Dalton > Kaepernick

  9. kingmj4891 says: Aug 5, 2014 10:23 AM

    Kaepernick does not have a high enough IQ to understand any of this, someone should tell him that his agent got schooled but he probably wouldn’t understand how.

  10. titansbro says: Aug 5, 2014 10:32 AM

    Squidword got screwed… lol. Fire yo agent son.

  11. bobby2478 says: Aug 5, 2014 10:32 AM

    Kap’s agent really screwed the pooch. Must not know anything about general financial management.

    The only potential value I can see in agreeing to do this would be if the injury guarantee is GREATER than $20 million.

    Otherwise if it’s $20 million or less, then why not buy the policy and have it payable to you directly? That’s better then the team’s “injury guarantee” which they can get out of paying for a myriad of reasons.

  12. shatho1 says: Aug 5, 2014 10:33 AM

    that’s just crazy

  13. dubblelznhell says: Aug 5, 2014 10:38 AM

    NFL = modern slave owners

  14. realitycheckbaby says: Aug 5, 2014 10:41 AM

    Kaep will hoist the lombardi trophy this year

    First, why would the Niners trade him, especially to the Hawks for their practice squad?

    As to his agent getting screwed, you’re wrong. Agent didn’t get screwed. Agent gets his cut of the guaranteed money but wouldn’t get anything for the disability policy. At 10% that could be $2 large.

    No one said Kap was Mensa.

    Who got screwed?

  15. doctorrustbelt says: Aug 5, 2014 10:49 AM

    If I understand it correctly… these type of contracts are the true meaning of being a team player.

    The player signs something that enriches him while protecting his employer.

  16. grilsteav says: Aug 5, 2014 10:51 AM

    Kaepernick and this Niner TEAM will be winning that superbowl against the Patriots this year.

  17. thethunderofgunns says: Aug 5, 2014 10:54 AM

    The 9’ers have someone from the front office on the phone with Tonya Harding right now asking her if she still has that crowbar…’we have a job for ya’!!!!

  18. jmblosser82 says: Aug 5, 2014 10:56 AM

    spin5150bc, Kaep is good, not great. 10-15 teams at most.

  19. huskywolverine says: Aug 5, 2014 11:05 AM

    It’s not a “gap in coverage” if Kaep has taken out his own policy where he is the payee/beneficiary. That wouldn’t be the contract….

  20. purpleguy says: Aug 5, 2014 11:11 AM

    I wonder if that disability dough would be tax free?

  21. scrp2 says: Aug 5, 2014 11:12 AM

    Like the commenter before said this is bizarre. Ok I get it – Kaep’s agent is not one of the elite but it’s not a license to take extreme advantage of the situation. This says a lot of what kind of people are in the 49er front office. If something happens to Kaep, 49ers get 20 million and his parents get nothing?

    You don’t have to pay him 22 million a year but structure the contract so the player has some dignity.

    That’s why Harbaugh is in no hurry to resign.

  22. joe2jerry says: Aug 5, 2014 11:12 AM

    Some of the comments on here are insane. Slave owners don’t pay out millions son. Kap’s deal was negotiated by his agent not him, his intelligence has nothing to do with it. Perhaps he asked, like Kurt Warner with Boldin/Brady with Welker to pay Crabtree with some of the savings…

  23. abqpacker says: Aug 5, 2014 11:20 AM

    This is old news. These details were made public when Kap signed the extension.

  24. prospector49 says: Aug 5, 2014 11:22 AM

    Kap got a 35 on the Wonderlick, a 4.2 GPA in high school, and turned down a baseball scholarship to Harvard in order to play football. For all those saying he’s not the sharpest tool in the toolbox, guess again.

  25. RegisHawk says: Aug 5, 2014 11:22 AM

    They say it’s a top of the line contract for 2nd tier QBs.

  26. thegreatgabbert says: Aug 5, 2014 11:29 AM

    Lizardman may have scored a 35 on the “Wonderlick”, but he only managed a 29 on the Wonderlic, as recorded by Pro Football Weekly in 2011. The only reliable source of the scores at the time.

  27. goldbloodedpodcast says: Aug 5, 2014 11:42 AM

    How come when Brady takes a “team friendly” deal he gets praised like the greatest person to walk planet earth, but when Kaepernick does it it means he got screwed? And where did this whole persona come from saying Kaepernick is dumb? If you actually did your research you would find out that one of his greatest attributes is his intellect.

  28. bullcharger says: Aug 5, 2014 11:47 AM

    prospector49 says:Aug 5, 2014 11:22 AM

    Kap got a 35 on the Wonderlick, a 4.2 GPA in high school, and turned down a baseball scholarship to Harvard in order to play football. For all those saying he’s not the sharpest tool in the toolbox, guess again.

    ———————–

    There’s no doubt he’s book smart. However, if book smarts were everyything there would be many more successful people in this world. Like Richard Sherman, Kaep is a social idiot. Completely immature. Some of the things that he does are really stupid (like wearing a Dolphins and not undestanding why it was wrong). He’ll become more mature over time I’m sure. He’s just a kid. He’ll get there.

  29. bengalguy says: Aug 5, 2014 11:47 AM

    Not to bright Kap. Fire yo agent Bro!

  30. burbankvikings says: Aug 5, 2014 11:51 AM

    Actually he scored a 38

  31. thegreatgabbert says: Aug 5, 2014 12:15 PM

    ..or was it a 52? You hear so many different things.

  32. ravenswhat says: Aug 5, 2014 12:22 PM

    Is Kaeps agent corky from life goes on?

  33. whenwilliteverend says: Aug 5, 2014 12:39 PM

    I’m willing to bet there’s more to this than what is mentioned in the story. No player would buy an insurance policy with his own salary payable to the team if there wasn’t something in it for them. I’d be willing to bet the team made some concession to him for buying that policy. The thing that makes me believe that is it’s mentioned in the story that the premium is $2 million PRE-TAX. That’s a significant word there. My guess would be that he could pay that pre-tax whereas had the Niners bought it, it would have been after tax. That may not seem like much of a deal but he’s probably in the 50% tax bracket and that’s a difference of $1M. The specific wording of that leads me to believe there’s more to the story than the eye can see.

  34. nrae73 says: Aug 5, 2014 12:42 PM

    Russel Wilson scored 28.

    That’s better right?

    yours truly,

    the 12th Man (football fans since 2012, 12 also being the combined score for all of the 12th Man)

  35. digitalsasquatch says: Aug 5, 2014 12:49 PM

    Oh, Kaep-Kaep…you got hosed. But you can still sorta afford to buy a whole ‘nother house for the shoe and hat collection.

  36. cincyalldaway says: Aug 5, 2014 1:00 PM

    prospector49 says:
    Aug 5, 2014 11:22 AM
    Kap got a 35 on the Wonderlick, a 4.2 GPA in high school, and turned down a baseball scholarship to Harvard in order to play football. For all those saying he’s not the sharpest tool in the toolbox, guess again.
    ===============================
    Which is EXACTLY why he’s the dullest tool in the NFL toolbox. Plenty of book sense and not one ounce of common sense. Dumb as a post. Dude really needs to fire his agent!

  37. senoreno says: Aug 5, 2014 1:03 PM

    Im a 12th man fanboy toy (or whatever contrived name we call ourselves now) so excuse me if I know so little about football. Like most of my fellow fans, I started watching their games in 2012. Most of us were Seattle Sounders FC fans prior.

  38. jtdapit50 says: Aug 5, 2014 1:21 PM

    Kap = Gonzo.

  39. barrancefong says: Aug 5, 2014 1:30 PM

    Something doesn’t make sense here. Isn’t this the definition of insurance? Kaep is paying $2 million dollars to get injury guarnantees in his contract. By buying the disability policy, the Niners will pay him $61 million in injury guaraneed money in the case something catastrophic happens on the field. Who get’s paid out on the disability policy is irrelevant. Kaep is still guaranteed the he’ll get $61 mill and the $20 mill is just relief for the Niners.

    If a $20 mill policy costs $2 mill, then a $61 million policy would definitely cost more. It really doesn’t seem that bizarre to me at all.

  40. mpatmas says: Aug 5, 2014 1:32 PM

    Why? Simple. Having watched every game he has played since 2007, I can tell you, Kap is even better as a running back than as a QB. He is big, fast and strong and unafraid. He takes a hit and gives them out too! Those of us who watched him from the beginning saw his 59 rushing TDs in college and his 4000 plus rushing yards. He cannot and will not be trapped in the pocket. That’s just not his style. He will run as he should! Few defenses can catch him. As a result he scares his coaches. They know he has a higher risk of injury. So, they are demanding insurance. Can’t say I blame them. But Kap ran through defenses in college wiyhput getting hurt. He knows when to slide.

  41. uplate5301 says: Aug 5, 2014 1:49 PM

    Given what these guys are doing for a living, it strikes me as insane not to be insured to the hilt if you can afford it anyway. One wrong hit and you may be stocking shelves for the rest of your life.

  42. jonnguy2014 says: Aug 5, 2014 1:49 PM

    I see 4 k pass and 1k rush for Kap this season

  43. paythevig says: Aug 5, 2014 2:22 PM

    Seattle will always be the Luigi to San Franchisco’s Mario. Always.

    Always.

    Have a splended afternoon.
    :D

  44. islandfocus2 says: Aug 5, 2014 3:04 PM

    ctiggs says:Aug 5, 2014 10:08 AM

    Future HOF #GoNiners #Nobodyhasitbetter #KapwillgetusSixthisYear

    redandgoldhitman52 says:Aug 5, 2014 10:10 AM

    Kaep will hoist the lombardi trophy this year

    LMAO!!!! Those are THE best jokes of the day!! Keep up!

  45. jakethesnake123 says: Aug 5, 2014 3:28 PM

    If not for a couple of great games against the Pack Kaep would have never got near as much money. The rest of his starts have been average at best.

  46. i thumbs down your comment says: Aug 5, 2014 3:34 PM

    The shareholders of the company insuring that $20MM contract just became huge fans of the 49ers’ O-Line.

  47. folkwolf101 says: Aug 5, 2014 5:41 PM

    First of all, Kaepernick’s contract came before Andy Dalton’s, who went for the same incentives plus had the hindsight of fine-tuning. Second, the insurance purchase was part of the negotiation. They gave him very good money, providing that he agree to purchase insurance that would also benefit the team. And, third, let’s face it: Kaepernick does not have great statistics as a passer, nor as a come-from-behind clutch passer. When his 49ers had a good lead in the NFC championship game, Kaep committed 3 turnovers in the last 10 minutes. He still has a lot of upside to grow. Luckily he has a great staff of coaches. Dalton, on the other hand, is a very good passer who unfortunately has Marvin Lewis as his headcoach making all the calls in the playoffs. Enough said.

  48. jvibottomline says: Aug 5, 2014 5:43 PM

    You agree, because you know you are the MAN and you will deliver BIG and collect all 126 million dollars, Kaepernick is a STUD!

  49. realitycheckbaby says: Aug 5, 2014 5:43 PM

    I see 4 k pass and 1k rush for Kap this season

    I see 4 picks and 100 yards passing for Kap this season…

    When playing the Hawks.

  50. realitycheckbaby says: Aug 5, 2014 5:50 PM

    Russel Wilson scored 28.

    Actually it was 43, but he wasn’t single handedly responsible for all the Hawks scoring in their Superbowl win, though he did have a 123.1 QB rating and didn’t throw a pick during the entire post season.

  51. shutdaup says: Aug 5, 2014 6:00 PM

    titansbro, what team do you follow? Rams?

  52. grapherdog says: Aug 5, 2014 6:54 PM

    The way the blog is written this is a bizarre financial concession for Kap. But there are so many things you can do to manipulate taxes, payments, salary cap implications that this seems like an ignorant assumption.
    Kap is paying $2 mil pre-tax, the Niners could have added in $2 mil somewhere else so the Niners benefit from the deal structure and Kap would lose nothing and the Niners could also benefit.
    My guess is that with a little research or more facts this blog wouldn’t be making these assertions and you guys calling Kap and his agent an idiot wouldn’t be piling on with such ignorant comments.

  53. mpatmas says: Aug 6, 2014 12:02 AM

    I have to laugh at the morons who posted comments about Kap’s intelligence. I guarantee you he is smarter than you are. 4.2 high school GPA and he holds a bachelor’s degree in business I believe from The University of Nevada – Reno, a tier 1 university in US News ranked among the top 200 universities in the US and among the top 400 universities in the world. He makes more money than all the losers on this blog combined.

    He probably has this insurance for one reason, he is the best dual threat QB in football history. He is certainly the best in NCAA history and judging by what he has accomplished in 2 seasons in the NFL, he will continue to set records in the NFL. He wants to run. The 49ers want him to run. Because of that he is at risk. Its a smart move. Most QBs stand there in the pocket like a statue. Not Kap. He has already changed football.

  54. jamescrz293 says: Aug 6, 2014 3:58 PM

    All the people Calling Kap dumb are the same ones who said the 49ers were dumb to pay him that much.

    But right after they read the actual contract, all of a sudden people make a 180 degree turn and start talking about Kap. This was a Win-Win deal because Kap has the ability to win multiple Super Bowls and get paid the money in his contract, but he knows he needs help. This contract allows the team to sign other players like Crabtree and Davis.

    People just don’t want to admit that they have nothing bad to say anymore. They can’t call him selfish or overpaid and they can’t call the team dumb for paying him money that will come back to bite them.

  55. sojuboi says: Aug 7, 2014 11:05 AM

    Notable NFL Wonderlic scores

    * Pat McInally, 50
    * Ben Watson, 48
    * Colin Kaepernick, 38
    * Andrew Luck, 37
    * Tom Brady, 33
    * Terrell Suggs, 31
    * Peyton Manning, 28
    * Richard Sherman, 24
    * Tim Tebow, 22
    * Dan Marino, 15
    * C.J. Spiller, 10
    * Tavon Austin, 7
    * Frank Gore, 6
    * Vince Young, 6

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