Insurance only pays a fraction of the salary, if at all. Some pitchers can't even get insured. The Diamondbacks made a big offer to resign Brandon Webb several years ago, but had to retract the offer when they couldn't find an insurance company that would insure it. Even when they do have insurance, it doesn't kick in until after 3 months, and even after it kicks in it only pays part of the remaining salary. A player that misses the entire season MIGHT get 35% of his salary paid by insurance.