Page 17 - Life Insurance underwriting Ebook IC 22

4. Explain the concept of dating-back (back-dating) of policies.

4.1 Dating back of policy / (back-dating of policy)

 Insurer charge premium based on the age at entry for traditional plans
as per the concept of level premium. Insurers sometimes give the client
the benefit of a lower age and therefore lower premium during the
entire tenure of the policy contract, and this is known as date-back the

policies.
 The daring back of a policy is an option available to the insured to as all
the benefit of lower age. Under this, die commencement date of the

policy is taken as the earlier date against the date mentioned in the
proposal form. The advantage is that the policyholder has to pay a lower
premium amount because of his lower age.eg; a person who is aged 30

yrs at the date of purchasing a policy can pay a level premium
throughout the police term at the premium applicable to a 29 yr old. So
long as his policy can be dated back within the financial year in which he

is purchases the policy Term plans cannot be back-dated.

4.2 Important guidelines for backdating of a policy

 A policy can be backdated only up to one year. Under no circumstances

can this dating back go beyond the financial year in which the
application is taken for policy issuance. In India dating back can be up to
the beginning of the financial year (1st of April of that financial year)

only.
 Some of the insurers charge interest when the dating back option is
exercised by the proposer for certain plans.

 In policies which are dated back the date of commencement of policy
(D.O.C) is always different from the date of commencement of risk
(D.O.R).

 The dating back of a policy can be done only if the insured is eligible for
insurance on the date of application.

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