Backdating to Save Age Made the Difference

Life Insurance

Recently I assisted a person who wanted to purchase a term life insurance policy ranging from $500,000 to $1,000,000 for either 10yrs or 20yrs. The person was in their early 60’s and in good health. There was an uncertainty of the amount of life insurance desired and I recommended they apply for the higher amount of life insurance in order to complete the carrier’s underwriting requirements. They can always accept the lower amount of life insurance at the time of approval. Carriers will always allow lowering the limit at approval but may balk at increasing the amount at issue if the proper exam requirements were not performed.

The person indicated that there was an application for life insurance pending with another carrier and the application through Pivot was for comparison purposes and the person would accept the best offer. This practice is not necessarily unusual but often times individuals do not want to apply with multiply carriers as multiple exams may be required and the Medical Information Bureau is notified of the multiple applications pending. The carriers will consider this matter when underwriting an application and will typically want a confirmation if the individual is going to accept the multiple applications or shopping for the best value.

My individual was approved and I learned, when I notified the individual of the carrier decision and presented the premiums for the various plans for a decision, that another carrier approved the application with a lower premium than the carrier offered through Pivot. The individual decided to accept the initial carrier’s offer and forego the approval with our carrier. I asked how much lower the premium was with the carrier the individual was accepting and I learned that the amount was relatively small and upon a review of the facts I learned that the carrier used a rating classification called last age (age at your last birthday) and the carrier through Pivot used nearest age (you are one year older on your 6 month birthday).

I calculated the premium based on the individual’s last age as the person was able to backdate the issue age up to six months prior to the next birth date and pay a much lower premium (the policy is dated BEFORE your sixth month birthday and premiums from that date are due). The annual premium was nearly $500 less by backdating the issue age and the savings over the 20 year period was almost $10,000. Backdating to save age was the motivating factor helping the person make the proper decision to purchase the life insurance needed. 

About the author: Ken Buccico holds a LUTC designation and has been in the life insurance business for 39 years. His wealth of experience empowers clients to make best possible decision regarding a life insurance policy. To explore the best  life insurance option, contact Ken at 1-800-651-1953 or