Fantasy Football Insurance: Stupidest Money Move Ever?http://www.fool.com/investing/general/2013/09/07/fantasy-football-insurance-stupidest-money-move-ev.aspx Dan Caplinger
September 7, 2013
The primary purpose of buying insurance is to protect you against losses that could crush you financially. By that measure, the latest trend in insurance doesn't make the grade -- unless you're betting a whole lot more on your NFL fantasy team than you should.
Fantasy football has become a big-money pastime, with an estimated 25 million fans participating. High-stakes leagues can have entry fees exceeding $1,000. But even in free leagues, the costs of player information guides, subscription-based scouting services, and other types of paid advice and tracking services add up. Players spent $1.67 billion last year on those services, according to information collected from Fox Business from the Fantasy Sports Trade Association.
With so much money at stake, insurance companies have jumped on the bandwagon, offering policies designed to pay out if certain players get injured. One company offers payouts of up to $1,000 if selected top-100 players miss more than eight or nine games of the regular season, depending on the structure of your fantasy league. What you'll pay in premiums depends on how injury-prone a particular player is, ranging from 9% to 13% of the coverage amount.
That's a lot to pay for coverage that might not get the job done. With some key players, all it takes is missing a game or two to cost you a chance at league victory. But if your player doesn't actually miss all those games -- even if he doesn't perform up to par -- then that coverage won't do diddly-squat to ease your financial pain.
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