It is legal to backdate a life insurance policy by up to 6 months to help you get the lowest rate allowed for that age. While that can theoretically save you money, you need to realize that you'll have to pay the premiums for the months covered by the backdate.Nov 23, 2021
Why would you backdate an insurance policy?
Companies purchase backdated liability insurance coverage to protect themselves from risks that may arise from past business activities. It covers possible gaps in coverage that are only discovered after a loss event occurs.
How many months can a life insurance policy normally be backdated?
Policies can be backdated a certain number of months. As a rule, the maximum is to backdate six months. Most companies allow backdating for sales reasons.
Can you backdate insurance claim?
Insurance companies typically don't offer backdated coverage because the loss has already occurred. ... As with most insurance policies, a backdated liability insurance policy will still contain a coverage limit. This protects the insurer from unlimited losses in the case that a claim becomes more expensive than estimated.
What is the main purpose of backdating a policy?
Backdating is a common (and legal) practice in the U.S. whereby a life in- surance contract bears a policy date that is prior to the actual application date. This practice often results in the opportunity for some insureds to reduce the annual premium paid.
What does it mean to backdate an insurance policy?
Insurance Policy Backdating, by definition, is the practice of putting a calendar date on any document that is earlier than the date on which that document was actually written. In some instances, it's perfectly legal.Nov 23, 2021
What's the reason for backdating a policy?
Backdating your life insurance policy gets you cheaper premiums based on your actual age rather than your nearest physical age or your insurance age. You'll pay additional premiums upfront to account for the policy's backdate.