As we know, purchasing life insurance is a financial transaction, and the amount issued should be comparable to the amount of anticipated financial loss. With non-traditional risks such as college athletes receiving NIL (name, image, and likeness) income, it is important for underwriters to assess potential concerns, even for many college athletes who are not high-profile figures. Underwriters need to analyze whether the athlete’s career can be sustained, if any lifestyle risks are known, and whether the requested insurance amount is logical.

Evolving Regulations

It was long held that U.S. collegiate athletes could not be compensated while in college. They had to remain with an amateur status. The student could not accept any form of payment beyond what their scholarship provided, assuming they had a scholarship. They weren’t compensated for media appearances, autograph signings, nor for endorsements of products or services, and they couldn’t accept any prize money. (They could only be reimbursed for actual necessary expenses.)

In recent years, changes have allowed athletes to receive compensation from their college or university sport. Notable highlights and dates:

• June 2021 – The U.S. Supreme Court rejected the National Collegiate Athletic Assocation (NCAA)’s “amateurism” argument as being overly broad and for failing to allow its student-athletes to receive compensation.
• July 1, 2021 – Students became eligible to cash in on endorsement deals for the use of their name, image, and likeness (NIL).
• May 2024 – The NCAA and the 5 biggest conferences (ACC, Big‑10, Big‑12, Pac‑12, and SEC) reached an agreement regarding the settlement of several antitrust lawsuits which involves a $2.8 billion payout over the next 10 years and now allow schools to be able to make payments to athletes for use of their name, image and likeness.
• July 1, 2025 – It was decided that some past players who played prior to NIL taking effect are owed back-pay for their time at their universities, and current athletes are now eligible to receive pay directly from the colleges and universities for which they play.¹

NIL Overview

Name, image, and likeness are the three elements that make up “right of publicity” that is used to protect against the misuse of an individual’s name, image, and likeness for commercial promotion of a product or service. Think of it as such: If an athlete’s photo was taken while wearing apparel containing a sport’s logo brand (e.g., Nike, Puma, Reebok) and that company used the photo to promote their products without the athlete’s consent, then the athlete could argue the company violated their “right of publicity.”

An NIL deal is an agreement between a student-athlete and a third party where the student-athlete can receive compensation for the use of their name, image and likeness. Athletes can be compensated for the use of NIL in numerous ways, from autographs via book signings, photos, or other memorabilia, to podcasts, hosting camps, making personal appearances, public speaking events, and so forth.

Key Elements to the Historic NCAA Settlement

The recent House v. NCAA legal settlement that went into effect July 1, 2025, marked a significant shift in the landscape of college athletics. With $2.8 billion in back-pay damages to be disbursed over the next decade, some former Division I athletes could see substantial compensation for their contributions to college sports dating back to 2016.²

The settlement includes:

1. Retroactive damages – Part of the payout aims to address past inequities faced by athletes who were not compensated for their roles in generating revenue for their schools. Those who will be covered include any Division I athlete who competed on or after June 15, 2016, or will compete anytime through June 5, 2034. For reference, there are 366 Division I schools with over 200,000 athletes.
2. Revenue-sharing model – This seeks to create a framework for schools to fairly compensate athletes moving forward, promoting a more equitable financial structure within collegiate sports. Starting in 2025, schools have the option to share up to $20.5 million with their student-athletes. This revenue will come from media rights, ticket sales, and sponsorships. Unfortunately for the fans, this will likely increase costs via a rise in ticket and concession stand prices.
3. Elimination of scholarship limits with a move to roster limits – This will have a significant impact on an athlete’s future as it will now make all players eligible for full scholarships. There’s going to be a lot more scholarships available across all the sports – some with significant increases of up to three times what their sport previously offered. Also notable are the new roster caps since everyone on the team is now eligible to receive money. An important takeaway is that just because these roster spots exist doesn’t mean they’ll be funded or coaches will use them.

Looking at the table below, you see football rosters being capped at 105 spots (vs. teams previously allowed up to 120 players). However, this allows for an increase in 20 scholarships since teams were previously limited to 85 scholarships within their roster of 120 players. Sports such as baseball, track, and lacrosse now will have up to three times the number of scholarships available (going from 12 to 18 scholarships up to 34 to 48). The consequence of this change means that baseball teams will have to reduce their roster from 40 athletes to 34. A track team will be limited to 45 members, and a lacrosse team will be capped at 48.

Concerns With the Settlement

As this continues to play out, there will be more questions, including:

• Which athletes will be compensated? Each school will decide how to allocate the money, but football and basketball will get the biggest shares since those two sports generate the most revenue from TV contracts and broadcasting. Some sports that are non-revenue producing have the option to pay players, but the sport may only receive a few hundred thousand dollars to divide across their entire roster. Many schools that aren’t part of the major conferences may choose not to pay anything to any of their players.
• How much will they make? While this $2.8 billion settlement will be a substantial total payout, the individual amounts will vary based on factors like the athlete's sport, the revenue generated during their time in college, and the duration of their participation at the institution.
• Will women be paid equally to men? Equity in compensation is a significant concern. The settlement aims to address historical disparities, but ensuring that female athletes receive equal pay to their male counterparts will depend on how the new revenue-sharing model is structured and enforced. There is some scrutiny over whether schools will comply with the federal law established in 1972 that prohibits sex discrimination in a school that receives federal funds.
  
  Two things have been established to enforce compliance of fairness are NILGo and the College Sports Commission:
  • NILGo is a tech platform that will help schools track athlete compensation and ensure compliance. Any third-party NIL agreement over $600 will be reviewed, and if any disputes arise external arbitration will take place.
  • College Sports Commission is a new governing body that will oversee enforcement to make sure third parties are paying players appropriate market value for services provided.
• Will schools that are unable to pay athletes be able to keep up with bigger, richer schools? It’s likely that schools with fewer resources may struggle to compete in attracting and retaining talent if they cannot match the financial incentives offered by larger programs. This could also be why we are increasingly seeing athletes use the transfer portal to go to a program that will pay them more.

Probability of a Professional Career

So, what are the chances of going pro? Honestly, the odds are not good. Overall, only 1%‑2% of college athletes will go pro, including the popular sports of football and basketball.³

Men’s Ice Hockey stands out as the top choice, as 7.1% of college athletes advance to the professional level. This is important when considering the longevity of earning potential tied to athletics, given the fact that the average professional athlete will only play for five years. It is also not uncommon for professional athletes to quickly spend their money and not save enough for their retirement years.

Underwriting High-Profile College Athletes

With both NIL and the recent NCAA settlement, we can anticipate seeing more life insurance applications come across our desks using this new financial gain as a reason, or at least the funding, for the application.

Most student-athletes can justify moderate insurance amounts based on their current and future income potential. If their chances of a significant professional career seem limited, a conservative approach with a limited face amount is advisable. However, if ongoing compensation is expected to grow after college, larger coverage amounts could be permitted. For high-profile athletes, discussions should involve a committee – be sure to get your managers and chief underwriter involved. If there are any concerns, you could limit coverage, exclude from a preferred risk class even if they meet the criteria, seek reinsurance support, or choose not to participate.

Underwriting the financial justification for life insurance in student-athletes is complex and requires developing a rationale that addresses traditional income multiples. Any coverage on a college athlete is highly speculative.

NIL money is not guaranteed in the future the way many professional contracts are, and endorsements aren’t guaranteed either. There’s no certainty that any individual player will reach the professional level, as injury and performance risks are always present. Ultimately, exercise prudent underwriting judgment and evaluate whether the decision is reasonable and consistent with the overall risk assessment.

This article was originally printed in On The Risk, Spring 2026 edition.

Endnotes

1. R. Russo, J. Williams, S. Mandel, “Historic House v. NCAA settlement gets final approval, allowing schools to pay college athletes,” The New York Times, June 6, 2025, https://www.nytimes.com/athletic/6367741/2025/06/06/house-ncaa-settlement-approved-revenue-sharing/.
2. D. Murphy, “Judge OK’s $2.8B settlement, paving way for colleges to pay athletes,” ESPN, June 6, 2025, https://www.espn.com/college-sports/story/_/id/45467505/judge-grants-final-approval-house-v-ncaa-settlement.
3. NCAA Recruiting Facts, https://ncaaorg.s3.amazonaws.com/compliance/recruiting/NCAA_RecruitingFactSheet.pdf.
4. C. Allen Pinkham, “The Mortality of Pro Athletes vs. the Rest of Us,” Contingencies, July/August 2001, Table 1., https://paperzz.com/doc/8511879/the-mortality-of-pro-athletes-vs.-the-rest-of-us.