Estimated value of Jim Harbaugh’s life insurance policy? $75 million

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At a time when college football players still get nothing beyond tuition, room, board, and snacks, a former NFL coach who runs the program at Michigan has finagled an impressive new contractual commitment. Which Michigan undoubtedly was able to afford because it doesn’t have to pay the football players.

In response to a recent report that Michigan is “loaning” Jim Harbaugh $4 million this year and $2 million for each of the next five for life insurance premiums, I asked an insurance expert to estimate the proceeds of the policy, if Harbaugh were to, um, satisfy the requirements of triggering coverage during the term of the policy. The expert, who asked not to be named due to current work with college football coaches in the procurement of life insurance, estimates based on the reported information that the policy would pay out a total benefit of approximately $75 million.

Michigan, under the terms of the loan, would get its premium payment back if Harbaugh, for example, develops pneumonia and dies after a Gatorade bath while the six-year policy is effective. Although Harbaugh’s beneficiaries are guaranteed to get at last 150 percent of the premiums paid, they stand to get a lot more than that, given the magnitude of coverage that a premium of that size can procure.

As explained by ESPN.com, the premium payments stop if Harbaugh quits or is fired, and if the policy thereafter is canceled, Harbaugh will be required to pay the money back. This means, as a practical matter, that he’d need to persuade his next employer to continue to make the payments if he leaves — or that he’d have to pay the proceeds out of his own pocket if he’s fired.

Meanwhile, at a time when Harbaugh’s life is insured for $75 million over the next six years, Clemson has paid for a paltry $5 million in insurance for quarterback Deshaun Watson in the event he suffers a career-ending injury while playing football in 2016 for tuition, room, board, and snacks. It’s a drop in the bucket of what Watson potentially would earn during his NFL career, if he’s one of the top draft picks and if he becomes a quality starting quarterback.

UPDATE 12:37 p.m. ET: PFT has obtained a copy of the agreement between Harbaugh and Michigan. It will be digested and analyzed and explained once I figure out how to digest and analyze and explain it.

25 responses to “Estimated value of Jim Harbaugh’s life insurance policy? $75 million

  1. This sounds extremely sketchy. Look for the Broncos to start “loaning” players huge amounts of cap free money in exchange for future life insurance payouts.

  2. The $75 million dollar number is eye catching, but that’s not what Harbaugh is really getting. He’s getting a loan for $4M followed by $2M each additional year. He has to pay it back. Really it pales in comparison to the real compensation that top 10 head football coaches receive. He just happens to be using it for a crazy amount of life insurance. Any of these coaches could do the same out of pocket if they wanted to.

  3. Which Michigan undoubtedly was able to afford because it doesn’t have to pay the football players.
    ===================================

    Every student gets free tuition, room and board at Michigan?

  4. are these college football players you speak of somehow compelled to accept this bad deal of playing for merely tuition, snacks & an opportunity to showcase their talents to potential future employers?

  5. This is crazy, but….comparing Harbaugh to Watson is a joke. Harbaugh is far more important to Michigan’s future than Watson is to Clemson’s or anyone’s but Watson himself.

  6. Tuition, room, board, and snacks. Ask any family who supports a student in this country, or even any self supporting student, if this is a bad deal at all. Then let’s complain about the level of the political debate and the populism running wild across the political spectrum.

  7. You get what you can get. It is an open market. It is the best system on the planet, and none are perfect.

  8. Seems like absurd premiums?

    I pay like 1% of payout value over the course of 20-year term.

    This guy is paying almost 20%?

    I know it’s not apples-to-oranges because of the value. But wow… Can’t he think of something better to do with $14M? Unless he’s sick and knows he’s going to kick it?

    Really odd, honestly.

  9. Well, I’m sure Michigan would consider loaning millions of dollars to their athletes as well but majority of them would probably blow it all on partying and what not.

    Plus at least Michigan can do this based on some sort of contract with Harbaugh whereas students are really held to nothing besides keeping a scholarship. I mean, what assets can they seize from athletes if defaulted? Nothing really.

  10. Michigan wants to win. Harbaugh is the best coach on the planet. Makes sense to me. I think Michigan got a bargain. The players will all benefit financially from winning too, thanks to coach Harbaugh. That’s why the players ask; who’s got it better than us? and they respond; Nobody.

  11. Sounds to me like Harbaugh is literally worth more Dead than Alive. This why we have so many Lawyers and Accountants. Otherwise, the average person with a math level of say, Middle school grade would be able to do most required work. It is the loopholes and gray areas that build the industry in to more complicated than it needs to be!

  12. jwcarlson says:
    Aug 19, 2016 1:09 PM
    Seems like absurd premiums?

    I pay like 1% of payout value over the course of 20-year term.

    This guy is paying almost 20%?

    I know it’s not apples-to-oranges because of the value. But wow… Can’t he think of something better to do with $14M? Unless he’s sick and knows he’s going to kick it?

    Really odd, honestly.

    I’m in the life insurance business. This isn’t the average guy’s term policy.This is a sophisticated planning technique called split dollar insurance. People like this get cash value policies. And at the end of a certain time frame, both the school and the coach will be made whole on this maneuver. And if the coach expires early, the school gets a lot of money and so does Mrs Harbaugh (she’s undoubtedly earned it).

  13. Must be afraid some Uof M alumnus will try to off him after getting his butt kicked by OSU again.

  14. Face amount sounds about right – $75 million. Paid up contract in 5 years. Could be any variance of type of policy, but it’s one that never goes away and carries a guaranteed minimum death benefit.

    Higher the tax bracket/net worth, the more frequent you see this type of planning.

  15. Just absolutely sickening the amount of money these colleges/coaches are making off of the backs of young men; all in the name of receiving a scholarship that’s literally worth less than a bag of peanuts in comparison to the billions that these colleges collectively receive.

    If all the players banded together and refuse to play unless paid… they would get paid and don’t let anybody convince you otherwise.

  16. ” tuition, room, board, and snacks,”

    At Michigan, the cost of attendance for an out of state student is somewhere north of 56k.

    Yeah, won’t someone please think of the kids.

  17. Whatever agent sold him that policy is headed on a vacation……for the rest of his/her life.

  18. Harbaugh is the best coach on the planet ?

    Wow, I would have thought that Urban Meyer, Nick Saban, and Bill Belichek not being on the planet anymore would have made the news.

  19. We selll life insurance and that is HUGE term policy. As a big Michigan fan I am not surprised, they are just protecting the interests of the school. Interesting just the same.

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