- Life Insurance covers the expenses that arise when somebody passes away.
- A good life insurance policy can cover your mortgage payments, your child’s education, and even therapy for your loved ones should you pass unexpectedly.
- New Jersey life insurance companies can help you find a policy to suit your needs and budget.
New Jersey is known as the Garden State and is located in the north-eastern United States. It’s bordered by New York to the north, and Pennsylvania to the west. With a population of 8.9 million people as of 2022, it’s the 11th-most populous state. The largest city in New Jersey is Newark which has a population of 282,090 residents. The state capital is Trenton which has a population of 83,974.
According to the Center for Disease Control and Prevention (CDC), the average life expectancy in New Jersey is approximately 77.5 years which is lower than the national average life expectancy, which is currently around 79.05 years in the United States. Over the past few years, the leading causes of death in New Jersey have been heart disease, Covid-19, and cancer. The homicide rate in New Jersey is around 4.3 homicides per 100,000 residents, which is lower than the national average of 7.5.
According to the U.S. Bureau of Labor Statistics, in New Jersey, the 90th percentile income is currently $127,240. The median income in the state is approximately $48,200. Most financial advisors recommend purchasing a life insurance policy that covers your loved ones for between 10X and 20X your annual salary. In New Jersey, this works out to around $1,272,400 – $2,544,800 dollars for most people.
How life insurance works in New Jersey
Life insurance is typically straightforward and easy to understand. The way it works is that you pay a premium for a policy, and if you die during the term of the policy, your beneficiaries are paid a death benefit. This is typically a lump sum of money that is paid out to your loved ones. The money can be used for anything they see fit, including funeral expenses, debts, living expenses, or anything else.
There are two main types of life insurance: term life insurance and whole life insurance. Term life insurance provides coverage for a specific period of time, usually 10-30 years. Once this term expires, so does your coverage. If you die during the term of the policy, your beneficiaries will receive the death benefit.
Whole life insurance provides coverage for your entire life. As long as you continue to pay the premiums, your beneficiaries will receive the death benefit when you die. Whole life policies are more expensive and complicated as they mix investing and insurance. Most people will be better off sticking with simple term life insurance.
If you’re not sure which type of life insurance is best for your situation, then it’s always best to speak with an insurance agent about your options. Like other insurance products such as health insurance, you need to evaluate your own needs before purchasing life insurance. Over time, those needs might evolve as you have more to protect or as you have children and wish to provide more financial support for things like helping a spouse pay off a mortgage or providing for your children’s college. Before getting life insurance quotes, you need to think carefully about a life insurance policy value that would help your surviving loved ones now and in the future.
With so many different life insurance products out there like term insurance plans, universal life insurance, and whole life, all with their own underwriting and coverage options, doing some research before getting the contact information for an agent makes it easier for you to make these big decisions. Ultimately, you might work with someone from an independent insurance agency to pick the right product for you. You can even elect choices from multiple products including life insurance coverage or long term care protection.
10 Biggest life insurance companies in New Jersey
New Jersey life insurance companies ranked by premiums written in the state.
|Rank||Company Name||New Jersey|
|2||Mass Mutual Life Ins||$538,809,143||7.40%|
|3||New York Life||$535,743,730||7.36%|
|9||Equitable Holdings Inc||$197,441,945||2.71%|
How much life insurance do you need in New Jersey?
The 90th percentile salary in New Jersey is approximately $127,240. As mentioned, most financial advisors recommend that you purchase a life insurance policy that will cover your beneficiary for at least 10X – 20X your average annual income. In New Jersey that works out to around $1,272,400 – $2,544,800. This amount will ensure that your loved ones can continue to pay their bills, settle your debts, and cover the cost of your final expenses.
You may also want to purchase additional life insurance to cover:
- Your mortgage (if you want your spouse and kids to be able to live in the home without worrying about mortgage payments)
- Children’s education costs (if you want your child’s education to be covered without any additional stress to your spouse)
- Bereavement therapy costs for your spouse and children (if you want them to spend time with a therapist after your unexpected death)
- Any other expenses that may be unique to your family or lifestyle
New Jersey life insurance laws
There are a few unique features with respect to New Jersey Life Insurance Laws that have an impact on your specific policy if you are a resident of the state.
Here’s what you need to know:
- The Free Look Period: During this period, a customer in New Jersey can return their policy and get a full refund, with no penalties or fees involved up to 10 days after the day of delivery. This allows customers to understand the insurance contract terms better and decide if the policy meets all their needs.
- Grace Period: New Jersey mandates a grace period of a minimum of 30 days. During this time, you can settle missed payments even after a premium due date to bring your policy back to good standing. In addition, the policy remains active for this time, and the provider cannot refuse a claim if the policyholder passes away.
- Contestable Period: Life insurance policies in New Jersey become incontestable after a maximum of two years. Insurers can review the claim and the policyholder’s records for inconsistencies or inaccuracies during the contestable period.
- Time Allowed for Settlement: Once a life insurance provider in New Jersey receives adequate documents regarding proof of death, they must settle the payment within a maximum period of 30 days, beyond which the provider would need to pay interest on the unpaid amount.
When most people think about life insurance, they think about death. But life insurance is not just about death; it’s about living. Life insurance is a contract between you and an insurance company in which you agree to pay premiums and the insurance company agrees to pay a specified amount of money to your beneficiaries when you die. This money can protect your family financially after you pass away and ensure that they have the funds needed to settle your final affairs and continue paying their bills.
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Joshua Holt is a licensed insurance agent (License #2785989) and founder of Biglaw Investor and Sidebar Insurance LLC, an insurance agency created by lawyers, for lawyers. His insurance expertise lies in the areas of life and disability insurance, particularly covering lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.