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What is Saving Age / Backdating in Life Insurance?
<lingo>When a life insurance policy is established, a person’s age can play a significant role in the cost of the plan. One of the ways insurance companies determine age is not just by the current year, but also by half years. Some companies allow a person to save their age or backdate. This would allow the company to choose a day prior to your half birthday to establish the policy. In doing this, it may help you to have a lower insurance rate for your coverage.</lingo>
Saving Age / Backdating Briefly and Clearly Explained
To understand saving age and backdating, consider why age matters to insurance companies. The older a person is, the more risk is present with that individual. Life insurance policies place specific risk related to that age. Some ages may even create a significant bump in costs, such as ages like 35, 40, and 50. The older you are, the more you will pay for coverage.
<twitter>When a life insurance policy is established, a person’s age can play a significant role in the cost of the plan. One of the ways insurance companies determine age is not just by the current year, but also by half years.</twitter>
When choosing the age for your policy, life insurance policies select your closest age. Are you 30 and 4 months or 30 and 7 months, for example? If you are 30 and 4 months, then the company may allow you to backdate, or choose the age of 30 to begin your insurance. If you are 30 and 7 months, you are closer to being 31. When this happens around those big premium dates, it can significantly impact your costs.
Some companies will allow you to save age. That means it will let you date the policy to the date prior to those big numbers. This can be beneficial to those who have a bigger and more important birthday approaching. In this situation, it is very important for you to consider the costs associated with backdating and whether or not saving age is beneficial to your policy costs. When it comes to choosing life insurance, it should always match your needs, but features like saving age, when available, can be helpful in keeping costs in line with your goals. Keep in mind this feature may not always be available.
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