Draft Protection Insurance: A Guide for Student Athletes

For a draft-eligible athlete, one play can change everything. A serious injury before signing day can erase millions in future earnings. Draft protection insurance exists to guard against exactly that — it protects an athlete’s financial future when a career hasn’t officially started yet.

Many talented athletes don’t know this coverage exists. As a result, they carry enormous risk during their most valuable window. This guide explains how draft protection works, what it covers, and who should consider it.

What is draft protection insurance?

Draft protection insurance is coverage built for elite college and pre-professional athletes. In short, it pays out if an injury or illness damages an athlete’s draft position or ends their career before they turn pro.

Think of it this way. A projected first-round pick has a future worth millions. However, none of that is guaranteed until they sign. Until then, a single injury can wipe it out. This coverage turns that risk into a protected asset.

Why student athletes need it

An athlete’s biggest financial risk sits in the gap between college and the pros. During that time, they have enormous earning potential but no contract yet. Because of that gap, they’re exposed.

Consider what’s at stake. A career-ending injury means the projected contract never happens. Even a lesser injury can drop an athlete’s draft position, costing them millions in signing value. In both cases, draft protection insurance steps in to replace what was lost.

What the coverage includes

There are two main types, and many athletes carry both.

Permanent total disability. This pays out if an injury or illness ends an athlete’s career before they turn professional. As a result, the athlete receives a lump sum to secure their future.

Loss of value (LOV). This is just as important. If an athlete suffers a covered injury and their draft position falls, loss-of-value coverage pays the difference. For example, if a projected top pick drops to a later round, LOV can make up much of the lost earnings.

Together, these two coverages protect against both the worst case and the more common one.

How much coverage and how it works

Coverage amounts are based on an athlete’s projected professional value. Therefore, a higher projection means a larger available policy. Premiums are calculated as a percentage of that coverage.

Some athletes access coverage through the NCAA’s Student-Athlete Insurance Program. Others work with private specialists to build a policy that fits their situation. Either way, the process starts with an honest valuation of the athlete’s draft outlook.

Who should consider it

Not every athlete needs this. However, it makes sense for anyone with real professional potential. Specifically, consider it if:

• You’re projected to be drafted in an upcoming class.
• You have a season or more before you can turn pro.
• Your future earnings depend heavily on staying healthy.
• You want to protect your family’s financial security, not just your own.

Common mistakes to avoid

• Waiting too long. Coverage is easiest to secure while you’re healthy and your value is rising.
• Assuming the school covers it. College athletic insurance is not the same as draft protection, and it’s usually far too limited.
• Ignoring loss of value. Many athletes buy disability coverage but skip LOV, even though a dropped draft position is the more likely outcome.
• Going it alone. Valuations and policy terms are complex, so expert guidance matters.

Protect your future before it starts

Your talent is an asset worth protecting — and the right coverage keeps one bad moment from erasing years of work. Because these policies are specialized, it pays to work with people who understand an athlete’s unique situation.

At Cannas Capital, we help athletes and their families protect future earnings with draft protection and disability coverage built for their goals. If you’re weighing your options, our team can walk you through what fits your situation.

This article is for general educational purposes and isn’t personalized insurance advice. Every athlete’s situation is different — speak with a licensed specialist to build a plan for yours.