South Carolina Coach Gets ‘Harbaugh’ Treatment with Split-Dollar Life Insurance Policy

Jon Corrigan | April 30, 2018

The University of South Carolina is utilizing what some consider a growing trend in the college ranks to retain big-name coaches: Split-dollar life insurance policies.

In late April, South Carolina’s board of trustees approved a $1.5 million amendment to women’s basketball head coach Dawn Staley’s contract. The university agreed to make five $300,000 loan payments over the next five years for life insurance policy, The State reports. However, under the terms of the agreement, Staley must remain the coach of the Gamecocks for all five years for the payments to continue; quite the enticement for Staley to remain in Columbia, SC through 2022.

Similar deals have been struck for football coaches like Jim Harbaugh at Michigan and Dabo Swinney at Clemson.

Schechter’s Vice President of Advanced Design, Jordan Smith, having previously written about the Harbaugh agreement, was contacted by The State to provide further analysis.

“[It] is effectively a loan from employer to employee where the loan proceeds are invested in a cash value life insurance policy. And the policy is designed to minimize the amount of death benefit purchase. Ordinarily when you think of life insurance, most people think the most efficient way to do it is to pay the lowest amount of premium and get the highest amount of death benefit. When you’re buying a policy for cash accumulation, you want to do the opposite, you want the highest amount of premium for the lowest amount of death benefit, so that your cash can build up more quickly within the policy.”

For South Carolina, that $1.5 million will eventually come back — the only cost is the time it will be tied up in the insurance policy. And for Staley, Smith said she “probably gets dramatically more value out of it than $1.5 million.” It’s a lucrative agreement for both parties.

Staley remains under contract with the university through the 2024-2025 season.

Read the full article here.

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Jon Corrigan

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