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New Jersey Life Insurance Policies and their purpose.

New Jersey Life Insurance Education Online and Consumer Resources answers.

How much Life Insurance do you need?

Well, the answer isn't really how much life insurance you need... it's how much investment capital your family will need at the time of your death. Their need for capital on a gross basis is really a function of two variables:

How much will be needed at death to meet immediate obligations; and
How much future income is needed to sustain the household.

The first category is fairly easy to estimate. It's the sum of final expenses including uncovered medical costs, funeral expenses and final estate-settlement costs and other lump-sum obligations such as outstanding debts, mortgage balance, and college costs.

The second variable is a bit trickier. It involves calculating the "present value" of future needed cash-flow streams. By talking with our Resident Agent you will get a rough sense of the needs for capital that might exist at your death.

A few tips:
A financial analysis of your needs depends upon the answers you provide. Please answer all questions your agent will need to ask to help you. If you do not understand a question, tell them to "slow down" or speak regular English.

Our Professional Resident Agents have been helping consumers with insurance decisions since 1986.

Why purchase Life Insurance?

Life insurance is the foundation of a sound financial plan. It provides financial security for your family by protecting your financial resources, such as your present and future income, against the uncertainties of life.

More specifically, life insurance provides cash to your family after your death. This cash (the death benefit) replaces the income you would have provided and can meet many important financial needs: It can help pay the mortgage, run the household, send your kids to college, and ensure that your dependents are not burdened with debt. The proceeds from a life insurance policy could mean that your family won't have to sell assets to pay outstanding bills or taxes. What's more, there is no federal income tax on life insurance benefits (in most cases).

Choosing the right policy.

Choosing a life insurance product is an important decision, but it can be complicated. As with any major purchase, it is important that you understand your family's needs and the options open to you.

If you are going to make a good choice when purchasing life insurance, you need to understand what type of Life Insurance policies are available. If one type of policy does not fit your needs, then ask and find out about other available Life Insurance policies. You can research more information on life insurance policies by checking with a licensed life insurance agent or a licensed life insurance company. You can also consult life insurance books that are available in your public library, as well as life insurance information available on the Internet.

New Jersey Group Life Insurance and Conversion Options.

Many employers, including the State of New Jersey, offer life insurance under a group plan and sometimes pay part or all of the premium. A medical exam is usually not required for insurance purchased this way, and the insurance can be less expensive than coverage purchased as an individual.
Upon separation of service or employment the group life insurance policy may be converted to a permanent policy. This converted policy will probably be much more expensive than the group insurance. Policies offered in this manner are different from group insurance, and you should evaluate the materials shown to you in the same way as if you were considering a purchase of an individual policy through an agent.

Research Different NJ Life Insurance Policy Types
  • Term Life Insurance Policies Overview.
    Term Life Insurance provides protection for a specific period of time. It pays a benefit only if you die during the term. Some term insurance policies can be renewed when you reach the end of the term, which can be from one to 30 years. The premium rates increase at each renewal date. Many policies require that you present evidence of insurability at renewal to qualify for the lowest rates.
  • Permanent or Whole Life Insurance Policies Overview.
    Permanent or Whole Life Insurance provides lifelong protection. As long as you pay the premiums, the death benefit will be paid. These policies are designed and priced for you to keep over a long period of time. If you don't intend to keep the policy for the long term, this may be the wrong type of insurance for you. You can cancel or surrender the policy in total or in part and receive the cash value as a lump sum.
    " If you need to stop paying premiums, you can use the cash value to continue your current insurance protection for a specified time or to provide a lesser amount of protection covering you for your lifetime.
    " You usually can borrow from the insurance company, using the cash value in your life insurance as collateral. Unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions. You ultimately must repay any loan with interest or your beneficiaries will receive a reduced death benefit. With all types of permanent policies, the cash value of a policy is different from the policy's face amount. The face amount is the money that will be paid at death or policy maturity. Cash value is the amount available if you surrender a policy before its maturity or your death. Moreover, the cash value may be affected by your insurance company's financial results or experience, which can be influenced by mortality rates, expenses, and investment earnings.
  • Different ways to purchase a policy.

    Some insurance companies solicit by mail or through the Internet. In most cases, the prospective buyer mails a completed application directly to the company. These methods of purchasing insurance may cost less because you receive little or no personal assistance, but they may also cost more because of the expense involved in mass mailing. Also, both Internet and mail order marketing may not provide a complete range of choices as target marketing often involves offering only one type of policy. That is why we offer you the best of all the methods listed above.
Details and important additional information to know.
  • Sales Illustrations.
    It is likely that an agent will show you one or more life insurance sales illustrations. An illustration consists of a series of numbers indicating how the policy works. The illustration usually shows the guaranteed results under the Life Insurance policy for each year in the future, and the results if all the non-guaranteed items continue at their present level. This will probably not happen as actual results may be better or worse than the non-guaranteed amounts shown in the illustration (but not worse than those that are guaranteed)
  • Notice: This website may be considered as an advertisement, and may lead to pertinent policy recommendations to NJ individuals and NJ businesses . Life insurance policies contain exclusions, limitations, reductions in benefits and terms for keeping them in force. A licensed financial professional will provide you with costs and complete details. The resources listed here are available for residents of New Jersey, Pennsylvania and Delaware USA only.