ORCHARD PARK, N.Y. -- Quarterback Colin Kaepernick gave up one insurance policy for another to provide financial protection against a significant injury this season.
As part of the restructured contract that Kaepernick signed Thursday, the 49ers purchased an insurance policy that will pay him $7.5 million if he sustains a long-term injury, according to multiple reports.
The sides agreed to a new deal that eliminates the $14.5 million guarantee for the 2017 season if Kaepernick sustains an injury in which he would not able to pass a physical by April 1, 2017.
The insurance policy is not covered by the league’s collective bargaining agreement and has little impact on the 49ers' salary cap. The $7.5 million insurance figure is tax-free and would approximate the take-home pay that Kaepernick would receive on the $14.5 million figure for the 2017 season.
The possible payout on the insurance policy would not be subject to the salary cap. However, the premiums -- which could range from $300,000 to approximately $500,000 -- are subject to the salary cap, a source told CSNBayArea.com.
As part of the deal, the remaining $1.375 million of per-game roster bonuses become fully guaranteed for the remainder of the 2016 season. He also would reportedly receive an additional $1 million on top of his $11.9 million salary for this season if he plays at least 50 percent of the team’s offensive snaps for the remainder of the season.
Coach Chip Kelly on Tuesday announced Kaepernick would take over as the 49ers’ starting quarterback in place of Blaine Gabbert. Kaepernick is set to make his first start since Nov. 1, 2016, on Sunday against the Buffalo Bills.
After getting benched in the middle of last season, Kaepernick underwent season-ending surgery on his left shoulder. He had offseason surgeries on his left knee and right thumb. Because he was unable to pass a physical by April 1, his entire $11.9 million salary for this season became fully guaranteed.
Kaepernick signed his original six-year, $115 million contract in June 2014. Under terms of the new contract, Kaepernick can void the final four years of his contract after this season. That move would enable Kaepernick to become an unrestricted free agent at the beginning of the new league year in March 2017.
ESPN and NFL Network were first to report the details of Kaepernick’s insurance policy.