Key Takeaways
- New Jersey requires a 10-day free look period for life insurance policies (20 days for senior citizens 65+)
- Life insurance policies must include a 2-year incontestability clause under New Jersey law
- New Jersey prohibits unfair discrimination based on gender, marital status, or domestic partnership
- Suicide exclusion in New Jersey is limited to 2 years from policy issue date
- New Jersey requires insurers to search for and notify beneficiaries of death benefits
New Jersey Life Insurance Policy Requirements
New Jersey law imposes specific requirements on life insurance policies sold in the state. These requirements protect consumers and ensure policy standardization.
Free Look Period
New Jersey provides free look periods for life insurance:
| Policy Type | Free Look Period |
|---|---|
| Standard Life Policy | 10 days |
| Senior Citizens (65+) | 20 days |
| Annuities | 10 days |
During the free look period, the policyholder can:
- Review the policy
- Return it for a full refund of premiums paid
- No questions asked, no penalty
Exam Tip: New Jersey's standard 10-day free look extends to 20 days for senior citizens age 65 and older. This is a key consumer protection.
Incontestability Clause
New Jersey requires a 2-year incontestability clause in all life insurance policies:
- After 2 years from issue, the insurer cannot contest the policy based on misstatements in the application
- Exceptions: Fraud, non-payment of premiums
- The clause protects beneficiaries from having claims denied due to application errors
New Jersey Specific Rules
- Incontestability period begins from the issue date, not effective date
- If policy lapses and is reinstated, a new 2-year period begins
- Does not protect against intentional fraud
Suicide Clause
New Jersey limits the suicide exclusion:
- Suicide exclusion cannot exceed 2 years from policy issue
- After 2 years, death by suicide is covered
- If policy is reinstated, new 2-year period may apply
- Premium refund only if death occurs within exclusion period
Unfair Discrimination Prohibitions
New Jersey has anti-discrimination laws for insurance:
Protected Characteristics
| Protected Class | Prohibition |
|---|---|
| Gender | Cannot use gender alone for rates unfairly |
| Marital Status | Cannot discriminate based on marital status |
| Domestic Partnership | Must treat same as marriage |
| Sexual Orientation | Cannot discriminate |
| Race/National Origin | Prohibited |
| Religion | Prohibited |
What IS Permitted
Insurers can consider:
- Age
- Health conditions
- Smoking status
- Occupation (with limitations)
- Lifestyle factors related to mortality risk
Beneficiary Protections
New Jersey has specific beneficiary protection laws:
Unclaimed Life Insurance Benefits
New Jersey requires insurers to:
- Cross-check policies against the Social Security Death Master File
- Locate beneficiaries when a death is identified
- Make good-faith efforts to pay death benefits
- Report unclaimed benefits to the State Treasurer
Unclaimed Property
If beneficiaries cannot be found:
- Death benefits are not forfeited
- Must be reported as unclaimed property
- Escheat to the State Treasury
- Beneficiaries can still claim from the state
Policy Delivery Requirements
New Jersey requires:
- Policy delivered within 60 days of issue
- Delivery must include policy summary
- Electronic delivery permitted with consent
- Producer must explain key policy provisions
How long is the free look period for a life insurance policy sold to a 70-year-old in New Jersey?
After what period can a New Jersey insurer no longer contest a life insurance policy based on misstatements in the application?