Backdating your life insurance policy allows you to reduce premiums, claim for maturity at an earlier date or even choose an apt payment cycle. Keep reading for more. Show Some of the most popular games of the console era offer the ability to turn time back.. Wouldn’t it be great if you could do the same in real life? Well, we haven’t yet got our hands on the time machine, but for your life insurance policy, it is pretty much possible. If you feel that your policy would have yielded much better returns or would cost you lower premiums if you had bought it a few months earlier, backdating is the answer. What is Backdating? As the name suggests, backdating is the idea or concept of putting an older calendar date on a policy or document as opposed to the current date. Consider this, you bought a life insurance policy on the 22nd of August 2017. Yet, you believe that if you have purchased the policy on the 1st of April 2017, you would have benefitted more. In such a scenario, you and your insurer can agree to change the date of the policy to a previous date such as the 1st of April. This is what backdate life insurance policy looks like. While it largely depends on your insurer, there usually aren’t any charges if you backdate your policy by less than a month or before the month of September. Are there any advantages? Absolutely! The following are some of the advantages that you can avail, should you wish to backdate your policy.
When you should not backdate While backdating your life insurance policy on paper might seem a great idea, there are a lot of instances when it is not. The following are some scenarios where you should not opt to backdate your life insurance policy.
Which life insurance policies should you backdate? While it is true that you can backdate life insurance policies, it might not be applicable to all the policies. And in some cases, it will not do a lot of good to you. Being aware of them will help you better decide whether or not to backdate certain plans. As discussed above, backdating your term insurance plan might not be the smartest of decisions. Similarly, insurers will not allow you to backdate any plan that is market-linked. In such cases, the only plans where you can successfully backdate your life insurance policy are money-back plans and endowment plans. Another important thing to keep in mind is some leading insurers only allow accumulation of interest and benefits on and after the 30th of September. Thus, if you backdate your policy much earlier than the 30th of September, it might not be required in the first place. While backdating your life insurance policy is a good option, you should take some caution before exercising it. And if you do not have a life insurance plan in the first place, it might be a good time to start securing your life. How many months can a life insurance policy normally be backdated from the date of application quizlet?The policy premium is lower than it would be if the policy was issued with the actual date the application was signed. Most states allow a policy application to be backdated up to 12 months. The producer has the authority to approve the backdating of policy applications.
Is there a time limit on life insurance?There is usually no time limit on life insurance death benefits, so you don't have to worry about filling a claim too late. To file a claim, you can call the company or, in many cases, start the process online.
How long is the life insurance policy grace period?Life insurance companies generally offer a payment “grace period" of around 30 or 31 days. Your coverage continues as long as you pay the amount owed within the grace period. If you die during the grace period without paying the bill, your beneficiary will receive the death benefit, minus the money you owe.
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