We generally ponder on our past financial decisions like, “Had I invested in ‘X’ stock five years back, I would have earned substantial returns by now.” However, the life insurance policyholders can stay delighted as they have the power to turn the clock back and change the start date of their policy to an earlier date.
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.This back-date policy will reduce the premium liability for the insured during the policy tenure.Let’s look at some advantages of backdating insurance policy.Though the difference in the premium amount seems to be minimal but it proves quite beneficial in the long run.Throughout the year, all of us look to invest in tax saving tools and one of the most preferred options is a life insurance policy.Backdating might not prove much useful for person aged 25 or 26 as the premium amount for these two age groups does not have much difference.
But the difference becomes substantial for individuals purchasing policy at an age of 40 and above.
In such a situation, if he backdates his policy to 6 months earlier, then he would be considered getting that policy at an age of 40.
Eventually, he would not be required to pay a higher premium.
Rather, the income goes up and down at the peak season and off season, respectively.
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.
It is not possible to backdate a claim any further than these periods.