Michigan Gives Harbaugh a Raise Via Life Insurance

Brian Anderson

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Michigan football coach Jim Harbaugh got a big raise in the form of a life insurance policy paid for by the university, providing a real-life example of how life insurance can be used for high-level executive compensation.

The policy is costing Michigan $4 million in premiums this year ($2 million in June, another $2 million in December), plus another $2 million for each of the remaining 5 years of Harbaugh’s contract.

Any guesses on what the death benefit is for the 52-year-old’s new policy? So far I’ve seen guesstimates in the media ranging from $20 million-$75 million.

Insurance Forums | Colleges turning to insurance: Michigan
 
That is good stuff for him! I like him and he is a great coach, I just hate that he's with Michigan. ;)

I wonder how the policy is designed and who the carrier(s) are. Would be interesting to know.
 
I doubt it's $75 million as one reporter mentioned....Probably more likely around half that amount in order to build enough cash in it to pay off the loans to Michigan if he left during those premium paying years.
 
I doubt it's $75 million as one reporter mentioned....Probably more likely around half that amount in order to build enough cash in it to pay off the loans to Michigan if he left during those premium paying years.

Actually it is very likely near that amount. I would guess around $60mm DB.

For every $1mm in Premium, a fully overfunded policy would generate around $15mm in DB for a 50 year old. That varies a bit from carrier to carrier obviously, but it is a good rule of thumb.

$20mm would be a MEC at that age unless he got the worst health rating possible.
 
Yeah, and consider that his heirs are guaranteed 1.5x the premium amounts... and MI is guaranteed their premiums back - that would be a minimum of about $35m. Regardless...its one big policy and what a great thing for him and his family!
 
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