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News Release

New Jersey Department of
Banking and Insurance


Acting Commissioner Richard J. Badolato

For Immediate Release:
April 27, 2016

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064


As part of Financial Literacy Month, Christie Administration Urges
Seniors to Be Cautious When Purchasing Financial Products

TRENTON - As part of Financial Literacy month, Department of Banking and Insurance Acting Commissioner Richard J. Badolato urged New Jersey senior citizens to be wary of fraud and scams and be careful when purchasing any financial products. 

“Senior citizens are a top target for fraud,” said Acting Commissioner Badolato. “There are many complex financial products today that are marketed mainly to seniors. While some can be of great financial benefit, others can be expensive, unnecessary, or in some cases, fraudulent.”

The Acting Commissioner provided some general guidelines for consumers purchasing some of the more widely used financial products marketed to seniors. 

Long Term Care Insurance – This is insurance to cover a wide range of medical, personal and social services individuals may need if they have a prolonged illness or disability. Consumers should make sure they have guidance from a certified financial advisor, insurance agent, or accountant on whether long-term care insurance is appropriate for their situation. They should make sure they understand their coverage; their premium obligations; and the exclusion for pre-existing conditions. Most important, they should be aware that their premiums can be increased.  For more detailed information on purchasing long term care insurance, go to: http://www.state.nj.us/dobi/pressreleases/pr120726.html

Life Insurance – Consumers should make sure they understand the difference between term, endowment and whole life policies. They also need to know the purpose of the policy, the beneficiaries, the cost and whether they have the resources to pay the premiums. For more detailed information on choosing a life insurance policy, go to: http://www.state.nj.us/dobi/pressreleases/pr120207.html

Annuities – Annuities are savings instruments designed to first accumulate funds and then to pay out those funds to consumers, usually during retirement. Consumers should ask questions including how are the funds paid out; how long is the payout period, whether there are surrender charges for withdrawal of funds and what interest rate is guaranteed before they purchase annuities. For more detailed information on purchasing annuities, go to:  http://www.state.nj.us/dobi/pressreleases/pr140410.html

Reverse Mortgages – Reverse Mortgages enable consumers to access the built-up equity in their residences to help pay for day-to-day expenses later in life. Most reverse mortgages require consumers to be age 62 or over. In purchasing these products, consumers should first shop around and then make sure they understand what the payments for their loan will be. Consumers should obtain at least three written quotes for up-front costs, interest rates, terms of the loan and monthly payments. Consumers should keep in mind that a low monthly payment is not always a deal; they should look at the total cost of the loan. For more detailed information on reverse mortgages, go to: http://files.consumerfinance.gov/f/201412_cfpb_reverse_mortgage_guidance.pdf

“It is important that consumers of all ages make informed financial decisions, whether it is a high school student about to open his first bank account, a college student applying for a student loan or a senior citizen considering a reverse mortgage,” Badolato said. “Having the right information makes the difference between making a good financial decision and a bad one.

For the last 10 years, the Department has conducted financial literacy programs for high school students and spoken to thousands of students in school across the State about topics including basic personal finance, the importance of credit and how to manage credit cards.  In 2012, the Department expanded the program to include programs for senior citizens and in 2013 for college students.  

April is National Financial Literacy Month, a national public awareness effort to help consumers establish and maintain healthy financial habits, take charge of their personal financial well-being and make smart financial decisions.

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