Video about backdating an insurance policy:
Backdating of Insurance Policy (LIC) - SANJAY DHUPAR
It's a little unfortunate that the word "backdating" is used for this concept, because with some other insurance products backdating can be a very bad thing. In case of money-back plans, if you backdate the start date of the policy then you are sure to get your first tranche earlier. This is why insurance companies let you backdate. Backdating is where a insurance carrier allows the applicant to apply a different effective date than the actual application date. In most cases, this may not matter but occasionally, it makes all the difference if the applicant passes away shortly after completing the application. Find more smart ways to save on life insurance. You may get a firm no from one insurer, while you may find another that is more open to the whole idea of it. Knowing this as an insured is very important as you want to know what your limitations are and what is likely to be available to you, should you ever need to actually go down this path. If the maximum age to be eligible for life coverage is 80 and you are 79 and 8 months, backdating would allow you to qualify if you go back 3 months assuming the rating is based on nearest age. Essentially, some carriers may allow you to backdate your effective date. It might be the biggest consideration which is the premier reason not to wait. The idea is not typically to have it go into effect in the past.
You may get a firm no from one insurer, while you may find another that is more open to the whole idea of it. It might be a year or two before you see any savings, so if you're not planning on keeping the policy for longer than that it may not be worth the trouble. Once they get past that window of time, the vast majority, if not all, will simply refuse to backdate the coverage that far. Legally, you need to have a car insurance policy that is going to be covering that automobile. An important thing to note here is that backdating works in the favor of policyholders in endowment and money-back plans but in case of term insurance plans, it is quite the opposite. But the difference becomes substantial for individuals purchasing policy at an age of 40 and above. Clearly you are not an underwriter. Many of us believe in purchasing important things on significant days like birthday, wedding anniversary and so forth. So, before going for backdating, one has to make sure that the total savings in premiums over the life of the policy is more than the extra premium paid for the backdated period. In such a scenario, if an individual incidentally of accidently buys his policy in his off season then he can get the policy backdated to the period of his maximum earnings. Suppose you bought a policy on 5th August but end up realizing later; had you purchased the policy two months earlier, you could have got it at better premium rates. The thing to remember with this, though, is that every single car insurance carrier is different. In such a case, the policyholder can pay the premiums for the current financial year at one go, whereas, for the coming year he can deposit the premiums on the due date, set by his insurer. The insurer will look at the midway point between your birthdays and round your age up or down depending on which birthday is closer. The term life applicant will need to pay for the preceding time May-June, December-January , so he can get the policy he bought in his off season, backdated to some date in the aforementioned vacation season. You are buying a policy contract that is going to go into effect, at the earliest usually, the minute that you pick up the phone to call the insurance carrier. The insurer increases the premium rate depending upon the age of the policyholder. Backdating means altering the start date of the life insurance policy to a timeline earlier than when the document was originally bought. It's unlikely that you actually died last month and are faking being alive today so you can cash in on a death benefit. First, what is it and what's the impact of doing this? Let's look a little closer at how this works. Backdating has been in the news but only referring to the scandalous behavior regarding insider stock purchases. Life insurance is different because by making your policy retroactive by a short period, the insurer isn't taking on any more risk. Some may be looking to do it, though, because they actually got into a car accident a few days ago, and have no insurance to cover it.
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