Insuring Against Disaster: Did Belle Ring Death Knell for Long-Term Contracts?

This Murray Chass story explains why clubs are so reluctant to extend to players anything longer than a 3-year contract. Evidently, the disability insurance that teams have changed substantially in the last couple of years:

"[P]remiums have risen more than 300 percent in the past 30 months, coverage has been reduced from five years of a player's contract to three years and the amount of coverage a broker can issue immediately is $18 million to $20 million, down from $42 million to $50 million just two years ago."

This will be an interesting variable in, among others, the Tom Glavine negotiations. Given that the 36-year-old Glavine is now demanding four years and $44 M, both of which exceed the amount that may be entirely insured, this may become a deal breaker for one or more of the teams involved.

One other note:

"If a player's five-year contract is insured for the first three years and the player sustains a career-ending injury in the first three years, the policy will pay off on all five years. But if the player gets through the first three years and the club wants to keep the contract insured, it has to apply for a new policy for the last two years. "

This may have some interesting consequences in contracts signed by older players. Similar scenarios to the Jay Bell involuntary retirement that the D-Backs instituted earlier this year may become common. If an older player is hurt in his third year, there is an incentive for the team not to allow him to return in order to collect the insurance. This is especially true if the player either had been displaying diminished skills prior to the injuries or has sustained an injury that promises to hasten the deterioration process. Why allow the player back onto the team if his skills can be replaced by another player at a reduced rate while the insurance pays the bulk of the high-paid has-been's salary?