When 49ers quarterback Colin Kaepernick agreed to give up his $14.5 million de facto insurance policy for 2017 as part of a restructured contract, the benefit for Kaepernick seemed to be limited. Put simply, he acquired the ability to hit the market next season, potentially allowing him to get more than the $14.5 million he was due to make next year, if he plays like he did in 2012 and 2013. He lost the protection against injury.
Via multiple reports, Kaepernick obtained different protection against injury. The team has purchased an insurance policy that will pay Kaepernick $7.5 million if he is sufficiently injured the rest of the way. The payment comes without taxes, which would simulate the take-home pay in California for the $14.5 million in injury guarantees he previously had for next year.
But the devil, as always, will have a tent pitched in the details. To give Kaepernick what he would have had without the new deal, Kaepernick needs to obtain the payment if he has an injury that keeps him from passing a physical before April 1. A policy like that, however, would be far more expensive than a traditional disability policy, which pays out only in the event of a career-ending injury.
Even if the policy says what it needs to say, Kaepernick risks an outcome in which his doctors believe he can’t pass a physical before April 1, but the doctors hired by the insurance company do. Which could force him to litigate the issue before ever seeing the money.
Which is very common when it comes to insurance company. Their sole commodity is money; thus, they love to harvest it as premiums. They hate to pay it out in the form of coverage.