What does backdated mean regarding my life insurance?
Whenever you apply for a life insurance policy, the common practice for the company is to issue you a policy based on your actual age. However, the insurance may takes it own time in completing the process that is mandatory before granting you the policy. So the date on which you apply for the policy and the date on which it is cleared by the insurance firm may necessarily not be the same. In such cases, the insurance may date your policy on the date of application, irrespective of when it clears your application. This is called backdating. By doing so, both the insurer and the insured stand to benefit as the former gets premium from an early date, whereas the latter becomes eligible for claim from the date of applying. However, there are several factors that decide whether to issue a policy and what premium is to be charged on a policy. For instance, the premium may be less if you are young. Again, age alone may not be the deciding factor because your health history and current health condition have to be ascertained by the insurance besides your gender and whether you are a smoker or not. A life insurance policy can also be backdated to a date prior to your previous birthday as that can result in a low premium. However, there are limitations in doing so.
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