The San Francisco 49ers and Colin Kaepernick both have to be happy about the huge extension signed on Wednesday, but details are still coming out regarding the specifics of the deal. One interesting note that was revealed on Thursday: Kaepernick will have to purchase an insurance policy that would pay out $20 million to the 49ers in the event of a career-ending injury, according to Albert Breer of the NFL Network.
That's particularly interesting for a number of reasons. For one, those kinds of things are relatively rare under the new collective bargaining agreement, and we didn't hear about them a whole lot before that either (it is possible that these deals were more commonplace and we simply weren't aware). For two, large portions of Kaepernick's contract are fully guaranteed against injury, so if such a thing were to happen at the right time, both parties would get paid -- Kaepernick by the 49ers and the 49ers by the insurance company.
We haven't heard much about this sort of contract detail happening in the NFL, but in recent years, we've heard plenty about insurance policies for college players entering the NFL. This offseason, the Los Angeles Register ran a piece on former USC receiver Marqise Lee, who took out a $10 million insurance policy in August. That policy covered $5 million in disability insurance, and $5 million in loss-of-value insurance. Obviously, the latter wouldn't apply here, but there's a lot of revealing information in the article.
Most interesting about the piece is the fact that the $10 million plan Lee received would likely cost about $100,000. That includes loss-of-value insurance, which might be a bit harder to gauge and could inflate the cost of the plan, but it's not out of the realm of possibility to think that Kaepernick would have to pay at least $200,000 for his plan, out of pocket. Paying more than that also doesn't seem too far-fetched given the position he plays and the fact that he's already in the NFL, but that's just speculation -- we don't know what kind of information the insurance company requires and uses.
Kaepernick's contract is definitely complex. On paper, he's signed a deal worth more than any other quarterback in the NFL, but there are specifics that could pay him significantly less. He's making a ton of money regardless, but there are potential de-escalators of about $2 million per year, with a potential for $12 million to go away if he doesn't play 80 percent of snaps and either appear in a Super Bowl or get named a first-team or second-team All-Pro. It is worth noting that Kaepernick's deal is guaranteed against injury for 2014, 2015, 2016, 2017 and a portion of 2018.
Every big contract we've seen to this point has set the stage for the next. Kaepernick made big money, but we can now expect someone like Russell Wilson to potentially top his deal. Now the question is whether or not the insurance policy will be something that sticks going forward. We often forget that contracts aren't solely about cap room for NFL teams -- they make a lot more money than they put into contracts, sure, but it's still a healthy chunk of change. Seeing other players agree to these policies would not be surprising going forward.