A grandparent is paying premiums under a life policy owned by his grandson, who is 13 years old, and no guardian appointment is on file. Under N.J.S.A. 17B:24-2, what is the annual limit on payments to a minor under age 15 without a guardian's appointment?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
N.J.S.A. 17B:24-2 permits payments on a policy insuring a minor even though the minor lacks general contractual capacity, but it caps the exposure: payments to a minor under age 15, without a guardian's appointment on file, may not exceed $2,000 per calendar year. The cap rises to $5,000 per calendar year once the minor reaches age 18. The graduated structure lets families insure a young child's life in modest amounts while preventing large accumulations from passing to a person who cannot yet manage them. The New Jersey Department of Banking and Insurance oversees compliance with these statutory payment limits.
Why the other options are wrong
- A) $5,000 is the cap for a minor aged 18 or older under N.J.S.A. 17B:24-2, not the limit that applies below age 15.
- C) No such minimal figure appears in the statute; the under-15 ceiling is $2,000 per calendar year.
- D) $100 is unrelated to minors' policy payments; the statutory cap for a child under 15 is $2,000 per calendar year.
Memory hook
Under 15, two grand a year; at 18, it climbs to five.