Life Insurance
Life insurance provides financial protection to your loved ones or business partners in the event of your death. It can be used to cover personal expenses, business needs, or legal obligations. In New Jersey, life insurance is often required in divorce settlements or used strategically in business planning.
Why Would Someone Be Required To Carry Life Insurance?
In New Jersey, life insurance is often court-ordered in divorce cases to secure alimony or child support. It’s also common in business settings where companies may require a policy on a key employee, naming the business as a beneficiary to ensure financial continuity if that person dies.
What Is Term Life Insurance?
Term life covers you for a specific period (e.g.,10, 20, or 30 years). If you die during the term, the policy pays a fixed amount to your beneficiaries. If you outlive the term, no benefits are paid. It’s often used to cover mortgages, protect income while raising kids, provide college funds, or meet court-ordered insurance requirements. Term life is generally the most affordable option.
What Is Universal Life Or Whole Life Insurance?
These are permanent life insurance policies that stay in-force for your entire life, as long as premiums are paid. They are often used for estate planning, business buy-sell agreements between partners, building tax-deferred cash value, etc. Universal life offers more flexibility in premium payments and death benefit amounts than traditional whole life.
Is There Anything Special I Need To Know About Life Insurance In New Jersey?
There are no unusual restrictions, but NJ courts commonly mandate life insurance in divorce judgements. Insurers must also follow NJ Department of Banking and Insurance (DOBI) regulations for fair marketing, underwriting, and disclosure practices.