I like the first idea, I would switch it to having some sort of "deductible" where you have to pay a certain amount, but the rest is covered a certain percentage. Pay more for better insurance, get a lower deductible and higher coverage. Examples:
Level 1 Insurance: 30,000 deductible, 50% coverage on remaining payments
Level 2 Insurance: 25,000 deductible, 60% coverage on remaining payments
Level 3 Insurance: 20,000 deductible, 70% coverage on remaining payments
Level 4 Insurance: 15,000 deductible, 80% coverage on remaining payments
Level 5 Insurance: 10,000 deductible, 90% coverage on remaining payments
So if you have level 3 and a 30k salary player gets injured for 3 weeks. Instead of paying 90k in salaries, you'd pay 20k + 70k(.30) = 20k + 21k = 41k.
I love the idea you have though, just looking at different implementations that make sense...
2x NBBA Champion: S55, S56. 3x USA Cup Champion: S54, S55, S56. WR for longest home streak ever at 11 in Season 47.