How Jim Harbaugh’s Life Insurance Make Him One of the Highest-Paid College Football Coaches

Caitlin Taylor
7 min readSep 17, 2020

Up until recently, Jim Harbaugh was the highest-paid college football coach. Now he’s top 3. But it’s not just because of his generous salary. The genius part is how his life insurance creates income at a level many times what Michigan is paying for it.

Photo by OliverCardall via Pixabay

We’re going to dive into the mechanics behind this. Specifically, what they did if they were smart and how you can take advantage of the same principles.

Basic Mechanics & What We Know

We know Michigan is paying $2 million a year for seven years. It’s a $14 million loan to pay for Harbaugh’s life insurance.

We know that he will owe the IRS what they call an imputed loan interest by receiving that loan as a type of compensation. But that’s more on the tax side. We’re focusing on life insurance.

For employment incentive, life insurance is all very well and good. But for real incentives, we need something with living benefits. I’m not talking about a long-term care rider, but cash value.

Cash value is part of many permanent life insurance contracts. It builds over time as you pay your premiums. The type of life insurance determines how that cash value accumulates within the policy.

Most people end up ignoring their cash value. Most people also buy whole life insurance, which builds cash value about as fast as a Porche 911 with racing tires in a blizzard.

You can use this cash value to pay premiums on your policy or take out loans. It’s essentially the insurance company saying, “you may borrow this amount from us, and we won’t ask any questions.”

Insurance agents have had a good time guesstimating what the death benefits on Harbaugh’s life insurance contract might be. They range from as low as $35 million to $75 million in death benefits.

We know that $14 million of the death benefit will go to Michigan when he passes away.

We don’t know what type of life insurance, what company, or any details other than the premiums.

If they were smart, here’s what they did

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Caitlin Taylor

Ghostwriter and blogger for businesses all over the world.