How A $750,000 Insurance Policy Made This Pitcher An Extra $66 Million

It might seem nuts to turn down a $144 million contract, but Max Scherzer knew exactly what he was doing. With a 39-8 record and 492 strikeouts over the past two seasons, the former Tigers pitcher felt he was worth even more than that. Turns out he had an ace up his sleeve the whole time.

You see, Scherzer had taken out an insurance policy on himself for $750,000. The policy allowed him to make a cool $40 million if he happened to get hurt and didn't receive an offer equal to Detroit's $144 million.

Of course, Scherzer didn't get hurt, but he claimed the insurance policy put his mind at ease. He didn't have to worry about earning a big salary–even if he suffered an injury, he was set for life.

And now, thanks to his new seven-year, $210 million contract with the Washington Nationals (added on to the $29.5 million he's earned in his career thus far), Scherzer is really set for life. His unique deal includes a $50 million signing bonus, and deferrals that will pay him $105 million from 2022 to 2028, or $15 million per year after the contract.

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According to the players' union, the deferrals actually lower the present-day value of Scherzer's contract to $191.4 million. But don't feel too bad for him–he'll avoid paying state taxes on the signing bonus and deferrals, because a signing bonus is only taxable in the state in which the player resides, and non-residents don't pay income tax in Washington, D.C. Since Scherzer doesn't live in the nation's capital, that's a nice little chunk of change he'll (eventually) take home, tax-free.

He could even move to Florida to save additional money, thanks to the tax laws there. Though something tells us Scherzer is going to be just fine with his situation now.

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