Should you backdate your life insurance policy?

Consider backdating your life insurance policy if you can save money in the long-run on your coverage. You’ll pay more money upfront, but could save a significant amount over the course of your policy’s term.

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Tory CrowleyAssociate Editor & Licensed Life Insurance AgentTory Crowley is an associate life insurance and annuities editor and a licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.&Amanda ShihEditor & Licensed Life Insurance ExpertAmanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

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Julia KaganJulia KaganContributing EditorJulia Kagan is a contributing editor at Policygenius, where she specializes in life insurance. Previously, Julia was the senior personal finance editor at Investopedia for nearly a decade, a vice president and editorial director at Consumer Reports, the editor of Psychology Today, and the vice president of content at Zagat Surveys.
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Ian Bloom, CFP®, RLP®Ian Bloom, CFP®, RLP®Certified Financial PlannerIan Bloom, CFP®, RLP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, he was a financial advisor at MetLife and MassMutual.

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Backdating your life insurance policy can help some people, especially if you’re older. The older you are when you apply for insurance, the more expensive it will be. Backdating a policy allows you to lock in a rate as if you were younger than your current age. You can only backdate as far as your last half birthday, and you’ll have to pay for each month between when your age changed. 

 If you’re young, the price difference between a backdated policy and one for your current age may be small enough that backdating won’t make much of a difference financially. With older applicants, the change in the year-to-year price could be significant enough that backdating (and paying extra premiums upfront) will end up saving more money in the long run.

Key takeaways

  • If you backdate your policy, you’ll have to pay more money upfront, but you could save money in the long run by locking in a lower rate.

  • Backdating your insurance policy is usually more useful for older individuals.

  • You can usually backdate a policy up to six months from the time you apply.

What is backdating insurance?

Backdating an insurance policy is when you set the day your coverage begins to a date in the past. This will allow the insurer to give you a cheaper rate because it’ll calculate your premiums as if you’re a younger age when the backdated policy starts.

Backdating insurance can lock you in at a lower premium, but there’s one caveat. You have to pay for all the months between your backdated policy date and the current month. This can mean paying up to six months of premiums at once when your policy begins. 

How does backdating insurance work?

Backdating revolves around your insurance age, which isn’t always your actual age but your nearest physical age — determined by your half birthday.

Here’s what those terms mean:

  • Actual age: Your real age

  • Nearest age: The age you’re physically closest to

  • Insurance age: The age at which the insurance company classifies you, usually your nearest age

If you apply for life insurance after your half birthday, you can backdate your policy so that its effective date is before your half birthday to get lower rates that will last for the entire policy term. 

For example, the day you turn 39, you have six months to apply for life insurance and get your 39-year-old rates. Once you’re 39 years and six months old, the insurance company considers you to be 40 and sets your rates accordingly.

So if you’re 39 years old and seven months old, you’ll have to choose between paying life insurance premiums based on your insurance age (40) or backdating your policy to your actual age (39) and paying two months of extra premiums to account for receiving premiums based on the month before your half birthday.

Why do life insurance companies care about your half birthday?

Life insurers set your premiums based on how likely you are to pass away while your policy is active. Because life expectancy goes down as you get older, your premiums go up as you age. 

How does your half birthday affect your life insurance rates?

Generally, the average cost of life insurance increases about 4.5% to 9% every year that you age — and even more in your older years. But when you’re younger, the pricing changes are smaller.

A 25-year-old who’s given an insurance age of 26 might see a difference of a few cents between the two premiums. A 55-year-old with an insurance age of 56, however, could pay almost $20 more every month. Over the life of a 20-year policy, that could be a $4,800 difference.

How far back can you backdate a life insurance policy?

Life insurance companies let you backdate a new policy up until your last half birthday to get lower premiums, but no more. This means that at most, you could backdate a policy six months. 

Learn more about buying life insurance

Age

Gender

Monthly Premium

30

Female

$36.90

Male

$48.89

31

Female

$37.49

Male

$49.24

40

Female

$60.65

Male

$75.24

41

Female

$63.65

Male

$78.95

50

Female

$139.50

Male

$188.29

51

Female

$147.86

Male

$200.02

60

Female

$354.51

Male

$499.98

61

Female

$376.43

Male

$533.16

Collapse table

Sample premiums are calculated for non-smokers with a Preferred health classification, obtaining a 20-year, $1,000,000 term life insurance policy. Life insurance averages are based on a composite of policies offered by Policygenius from Brighthouse Financial, Corebridge Financial, Legal & General America, Lincoln Financial, Mutual of Omaha, Pacific Life, Protective, Prudential, and Transamerica and may vary by insurer, term, coverage amount, health class, and state. Not all policies are available in all states. Rate illustration valid as of 03/01/2024.

You can see that the savings you’ll get from backdating a policy increase substantially the older you get. 

For example, if you’re a 30-year-old female and you’re offered premiums based on your nearest age being 31, backdating your policy saves you $0.59 per month ($141.60 over a 20-year policy). But if you’re 50 and underwritten as if you’re 51, backdating your policy can save you $8.36 per month and $2,006.40 over the course of a 20-year term policy.

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When do you pay the extra premiums for backdating?

How and when you pay for the months between your backdated policy date and your approval date depends on whether you set up your premiums to be paid monthly or annually.

Here’s what happens when an insurance policy is backdated depending on how frequently you pay your premiums.

  • Monthly: You’ll pay your extra premiums when you pay for your first month of coverage. If your policy is backdated two months, you’ll pay three months of premiums for your first payment.

  • Annually: Your extra premiums are part of your next annual payment. You’ll be charged on your policy’s adjusted date instead of when you were approved. For a policy approved in June and backdated to April, you’ll be charged next April.

Is backdating right for you?

When you’re deciding whether it’s worth it to backdate or not, there are three questions to consider:

  1. How much money will you save by backdating??

  2. How much extra money will you have to pay upfront?

  3. How long will it take you to break even on your payments?

Generally, backdating your life insurance policy isn’t as useful for younger applicants because the change in cost from year to year isn’t that much. But as you get older and see bigger jumps in your premiums with each birthday, backdating might be the right choice.

A Policygenius agent can answer any questions about backdating that you have and run the numbers with you to determine if backdating is a good option. 

Authors

Tory Crowley is an associate life insurance and annuities editor and a licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.

Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

Editor

Julia Kagan is a contributing editor at Policygenius, where she specializes in life insurance. Previously, Julia was the senior personal finance editor at Investopedia for nearly a decade, a vice president and editorial director at Consumer Reports, the editor of Psychology Today, and the vice president of content at Zagat Surveys.

Expert reviewer

Ian Bloom, CFP®, RLP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, he was a financial advisor at MetLife and MassMutual.

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