Jake Butt to collect on loss-of-value policy following torn ACL

 

ANN ARBOR, MI – NOVEMBER 19: Michigan Wolverines tight end Jake Butt (88) takes in the action and gets teary eyed following the 20-10 victory in the NCAA football game between the Indiana Hoosiers and Michigan Wolverines on November 19, 2016, at Michigan Stadium in Ann Arbor, Michigan.

Butt, who tore his ACL in the Orange Bowl against Florida State, has a $2 million loss-of-value policy that he started collecting insurance on when he wasn’t picked in the top half of the third round Friday night.

He first started collecting, at $10,000 a pick tax-free, in the middle of the third round, a source with knowledge of the policy with ISI told ESPN. Through the 141st overall pick near the end of Round 4 on Saturday, Butt was set to receive $500,000 on the policy.

The 2016 Mackey Award winner for the best tight end in the nation, Butt suffered a second torn ACL in the Orange Bowl. The subsequent surgery prohibited him from showing teams what he could do.

Butt took out a $2 million total disability policy with a $2 million loss-of-value policy attached before the start of the season. The loss-of-value rider cost roughly $25,000, a source said.

Through the first three rounds, six tight ends have been drafted: Alabama‘s O.J. Howard (No. 19), Ole MissEvan Engram (23), Miami‘s David Njoku (29), South Alabama‘s Gerald Everett (44), Ashland‘s Adam Shaheen (45) and Florida International‘s Jonnu Smith (100).

Loss-of-value policies have gained popularity over the past five years. The players who have most famously collected from their draft stock falling have been Oregon‘s Ifo Ekpre-Olomu, who made $3 million in insurance after tearing his ACL and dropping to the seventh round in 2015, and Notre Dame‘s Jaylon Smith, who collected $850,000 from his fall to the second round after teams passed on him following ACL and MCL tears. Both policies were also with ISI.

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