LakecrestSteeler wrote:I keep hearing about these insurance companies that would pay out $10,000,000.00 for $500,000.00. How does this business model work? There is no way there is a business model for insurance that allows a claim against the policy based completely on the insuree making a decision.
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“Hello Mr. Bell, this is Lloyd London calling. The terms are as follows. You give us $500k and we will pay you $10,000,000 if you decide that not showing up for work is in your best interest. Our actuaries ran the numbers and it looks like the odds of you not showing up and collecting your $10,000,000 are very slim. As a matter of fact we have 100 other candidates that will pay $500,000 policy premium and we see no reason why they would not want to work and collect $10,000,000 too.”
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I know there are policies that protect against injury, but there is no way there is a policy that would guarantee Bell’s being made whole depending on his hold-out strategy.
I think you're confused on how that insurance policy would be structured.
It wouldn't be taken out against against the prospect of him losing money while sitting out, it would be taken out against the prospect of him playing and potentially suffering a career-altering injury.
ie, he decided he's going to play, but to mitigate the risk, he takes out a high interest loan. Should he suffer a severe enough injury that could affect his long term earning potential, he could then file a claim and try and recoup the amount of money he'd potentially lose out on due to the injury.
With such a policy in place, he could theoretically play while also mitigating the risk of a major injury.
The debate a few pages back was about whether or not he could get a policy with a dollar amount high enough to make it worth it to Bell.