New Jersey Life Insurance
- To safeguard consumers, New Jersey law includes provisions that regulate life insurance. Know your rights as a New Jersey life insurance policyholder.
For many Americans, life insurance coverage is essential, providing the resources family members need to pay for funerals and burials when loved ones die. Getting the right coverage is crucial, but navigating options and state regulations can make it hard for consumers to find a policy that suits their family's needs and fits comfortably into their budget. Fortunately, when you know your rights as a New Jersey life insurance policyholder, you can make a more informed purchase decision.
New Jersey Life Insurance Rules and Specifics
Under TItle 17 of the New Jersey Revised Statutes, life insurance companies in the state must adhere to certain regulations, with oversight provided by the State of New Jersey Department of Banking and Insurance. Title 17 statutes are designed to promote industry standardization, healthy competition and a fair marketplace for consumers. Highlights include:
- A 10-day cancellation of policy provision: This 10-day free look period lets new policyholders cancel coverage and receive a full refund of premium payments, charges and fees. All cancellation requests must be in writing.
- A 30-day grace period for late payments: Under New Jersey law, insurers must provide a 30-day or one-month grace period to policyholders who've missed a premium payment. During this time, coverage remains in force, and if the insured dies, the late premium may be deducted from the death benefit payout.
- A death benefit payout within 60 days: After the insurance company receives proof of death, it must settle the claim within 60 days. However, the insurer may legally require a claimant to supply proof of interest in a policy before paying a claim. Additionally, if an investigation is necessary, the claimant must be notified within 45 calendar days, but uncontested portions must still be paid within 60 days.
Life Insurance Resources in New Jersey
Whether you're already a policyholder or just considering coverage, several resources are available to help New Jersey residents with life insurance questions and issues:
- The State of New Jersey Department of Banking and Insurance: In addition to licensing and overseeing the state's insurance entities, the department's Division of Insurance provides consumer education, handles general inquiries and responds to complaints against insurance entities.
- New Jersey Life & Health Insurance Guaranty Association: Resident policyholders whose company of issue has declared bankruptcy may reach out to New Jersey's guaranty association for assistance. As long as premiums are current or the policy has a remaining cash value, the guaranty association provides continuing death benefit coverage of up to $500,000 and cash surrender coverage of up to $100,000. Annuity benefits may also be protected.
- The National Association of Insurance Commissioners: The NAIC helps consumers nationwide make informed insurance decisions. Its website includes learning guides, a company search and a lost policy locator service that can help beneficiaries find policy information for deceased loved ones.