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Kaepernick took out insurance policy before renegotiated deal

San Francisco 49ers quarterback Colin Kaepernick put himself in position to start this week when he signed a reworked contract that, among other things, took away his injury guarantees for 2017. The change means San Francisco won't be on the hook for his $14.5 million base salary in the event of a major injury.

But Kaepernick did protect himself just in case.

According to several sources with direct knowledge of the situation, Kaepernick, who's set to take his first snaps as a starter in 2016 against the Bills, took out a $7.5 million loss-of-value insurance policy prior to signing his renegotiated contract. The policy covers Kaepernick in case of a serious injury in a way that is similar to what his now-removed injury guarantees did.

If Kaepernick were injured and collected under the loss-of-value policy, the $7.5 million maximum payout he collected would not be subject to income taxes (assuming he paid the insurance policy premiums himself). The $7.5 million proceeds from the insurance policy would net him the same money on an after-tax basis as if he made a $14.5 million salary.

In other words, for the price of a few hundred thousand dollars, Kaepernick is made whole in the event of an injury, while also reaping the benefits of his new deal. And there are benefits. Instead of a lengthy contract that kept him with the Niners until 2020, his new deal is just through 2017 -- but he has an option to void it after this season.

The opportunity to become a free agent prior to the league year in 2017 -- one Kaepernick is expected to utilize -- is a big one. If he thrives like the 49ers hope in Chip Kelly's offense, he'll be able to cash in again, either in San Francisco or elsewhere.

Other benefits include turning roster bonuses into guaranteed salary, giving Kaepernick an additional $1.375 million this year. Kaepernick can earn $1 million more in play-time incentives, with the threshold set under 50 percent.

And because he can void the deal and opt out beginning eight days before the 2017 league year, he can't be franchised. Plenty of factors that make for a win-win decision.

All the focus will be on the field Sunday for Kaepernick, who gets under center after a preseason that included a strong stance on social issues and improved health. His stance on social issues also has helped him build a stronger rapport with his teammates. But in the event it all goes wrong in San Francisco, he made sure to protect himself just as his team did.

Follow Ian Rapoport on Twitter @RapSheet.

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