3.3 New Jersey Disability and Long-Term Care Insurance
Key Takeaways
- New Jersey Temporary Disability Insurance (TDI) is mandatory for most employees: 85% of average weekly wage, capped at $1,119/week in 2026, up to 26 weeks, after a 7-day waiting period.
- Family Leave Insurance (FLI) pays the same 85% of AWW ($1,119/week max in 2026) for up to 12 weeks to bond with a child or care for a seriously ill family member.
- Individual disability income policies get a 10-day free look; long-term care (LTC) policies get a 30-day free look and must be guaranteed renewable.
- LTC policies must offer inflation protection and a nonforfeiture benefit, and limit pre-existing condition look-back to six months.
- Producers must complete an 8-hour initial LTC training plus 4 hours of ongoing LTC training every 24 months before and while selling LTC and Partnership policies.
Disability Income Insurance in New Jersey
Free look and required provisions
An individual disability income policy carries a 10-day free look from delivery - return it inside the window for a full refund. New Jersey adopts the standard Uniform Individual Accident and Sickness provisions, several of which are tested verbatim:
| Provision | Standard requirement |
|---|---|
| Grace period | 31 days (annual-premium policies) |
| Reinstatement | Lapsed policy may be reinstated, generally within 3 years |
| Notice of claim | Within 20 days after a loss begins |
| Proof of loss | Within 90 days of the loss |
| Time of payment of claims | Within 30 days after proof of loss for periodic indemnity |
| Legal actions | No suit earlier than 60 days, or later than 3 years, after proof of loss |
Mandatory state TDI (the big one)
Unlike most states, New Jersey runs a mandatory Temporary Disability Insurance (TDI) program for non-work-related illness or injury (workers' comp covers job-related injuries). Key 2026 figures:
| Feature | 2026 detail |
|---|---|
| Who is covered | Most NJ employees (state plan or approved private plan) |
| Funding | Employee and employer contributions |
| Benefit | 85% of average weekly wage |
| Maximum weekly benefit | $1,119 (2026) |
| Maximum duration | 26 weeks per period |
| Waiting period | 7 days (retroactively paid if disability lasts 3+ weeks) |
Exam Tip: Memorize 85% / $1,119 / 26 weeks / 7-day wait for 2026. Distractors swap in 66 2/3% (old rate), 50%, or 52 weeks. The $1,119 cap rose from $1,081 in 2025.
An employer may opt out of the state plan only by adopting a DOBI-approved private plan that provides benefits at least equal to the state plan and costs employees no more. To qualify for TDI, a claimant generally must have met a base-year earnings/weeks test (worked a minimum number of weeks or earned a minimum total) and must file the claim promptly - typically within 30 days of the disability starting.
Because TDI is a state benefit, it stands apart from any private disability income policy the insured may own; a producer should explain that private DI coordinates on top of TDI rather than replacing it, and that TDI alone (capped and time-limited) rarely replaces a higher earner's full income.
Family Leave Insurance and Long-Term Care
Family Leave Insurance (FLI)
New Jersey Family Leave Insurance (FLI) is a separate mandatory benefit that, like TDI, pays 85% of average weekly wage up to the same $1,119/week (2026) cap, but for up to 12 weeks in a 12-month period. FLI is for caregiving, not the worker's own disability:
- Bonding with a newborn, newly adopted, or newly placed foster child
- Caring for a seriously ill or injured family member
- Handling matters arising from domestic or sexual violence
Long-Term Care (LTC) insurance
LTC is the most heavily regulated product in this section. Note the 30-day free look - three times the disability/health window - and the consumer-protection provisions:
| Provision | New Jersey requirement |
|---|---|
| Free look | 30 days |
| Renewability | Must be guaranteed renewable |
| Pre-existing look-back | No more than 6 months |
| Inflation protection | Carrier must offer an option (e.g., 5% compound) |
| Nonforfeiture | Carrier must offer a nonforfeiture benefit |
| Elimination period | Must be clearly disclosed at sale |
Inflation protection options include 5% compound or simple annual increases, a CPI-linked adjustment, or a guaranteed purchase (benefit-increase) option. The carrier must offer at least one; the applicant may decline in writing.
The Long-Term Care Partnership Program
New Jersey participates in the federal LTC Partnership Program, which links private LTC coverage to Medicaid. The benefit: dollar-for-dollar Medicaid asset disregard.
- Buy a Partnership-qualified LTC policy (must include the required inflation protection).
- Use the policy benefits for care.
- If benefits exhaust and you apply for Medicaid, you may protect (keep) assets equal to the benefits the policy paid, beyond the normal Medicaid limit, and Medicaid will not seek estate recovery against those protected assets.
Example: a Partnership policy pays $250,000 of care. The insured may shield an extra $250,000 in assets and still qualify for Medicaid for further care.
Producer training requirement
To sell LTC (including Partnership) policies in New Jersey, a producer must hold a life or accident-and-health license and complete a one-time 8-hour initial LTC training, plus 4 hours of ongoing LTC training every 24 months. Selling LTC without the completed initial course is a regulatory violation.
Benefit triggers and tax-qualified status
Most LTC policies sold today are tax-qualified (TQ) under federal law, which sets the standard benefit triggers: benefits begin when a licensed health practitioner certifies the insured either (1) cannot perform at least 2 of 6 activities of daily living (ADLs) - bathing, dressing, eating, toileting, transferring, and continence - for an expected 90+ days, or (2) needs substantial supervision due to severe cognitive impairment such as Alzheimer's disease. The exam frequently tests the 2-of-6 ADLs and the 90-day expectation.
The elimination period is a deductible measured in days (commonly 30, 60, or 90 days) during which the insured pays out of pocket before benefits start - it is not the same as the free-look period. Pair this with the 6-month pre-existing look-back above: New Jersey caps how far back a carrier may look for prior conditions, a tighter limit than older LTC products allowed. Finally, remember that the required inflation-protection offer is what keeps a policy Partnership-qualified for younger buyers - without it, the asset-protection feature can be lost.
For 2026, what does New Jersey Temporary Disability Insurance (TDI) pay and for how long?
How does the free-look period on a long-term care policy compare to that on an individual disability income policy in New Jersey?
What is the primary advantage of a New Jersey Partnership-qualified long-term care policy?
Before a New Jersey producer may sell long-term care insurance, what training is required?