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In response to
"I don't think that's right. The insurance will pay off if someone blows out his knee."
by
spamlet
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Your IM is likely wrong. Provided it's the same as with Belle.
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If they need the insurance payout they will need to keep him on the 25-man roster. So they would only have 24 players available to the 25-man roster for the remainder of his contract. They are much better off with a lifetime ban. They don't need to pay him, don't take a luxury tax hit on any of his money (I don't know if they would or not with insurance), and the get the full 25-man roster.
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