Backdating Life Insurance Policies What you pay for a life insurance policy is based in part of your age at the date of issue.
The insurer will either use your actual age or the age you are nearest to based on the birthday you’re closest to.
Backdating, by definition, is the practice of putting a calendar date on any document that is earlier than the date on which that document was actually written. Backdating Car Insurance Policies Backdating a car insurance policies is illegal and something no reputable insurance company or agent would ever do. Because it implies that you had coverage on your vehicle before you actuallydid.
Let’s look at how backdating affects different aspects of car insurance, health insurance and life insurance.
If you could do this, nobody would ever buy car insurance until after an accident happened.
That would have the effect of turning the car insurance industry’s risk-assessment-based business model on its head.
The event did not happen during the time period required for the benefit so an attempt is being made to pretend that it did.
This is a fraud on the tax authorities, a criminal offence and is likely to get the lawyer who prepared the document disciplined by his regulator and possibly also charged as a co-conspirator.
Of course, any attempt to purchase a backdated life insurance policy on your Aunt Minnie who has alreay passed on is out and out fraud. Backdating Health Insurance Policies In regards to health insurance, backdating the effective date of a policy can be used to make your age at issue qualify for a lower premium. State laws differ in their policies aboutbackdating health insurance policies, so you’ll have to check with your state insurance commissioner.Some states will the amount of backdate to six months.A couple other important points about backdating and health insurance.He also has no way of knowing whether the backdating will be scrutinized by a regulatory authority or even a Court.For example, will the document be provided in support of the party’s tax position giving the impression that a signed legal contact was in place before it was?Alternatively, is there a way of legally trying to achieve the required objective?If the document is putting in place something which “should have been done” but hasn’t been, usually for tax or similar reasons, then the position is straightforward.In theory, this would appear on the face of it to be a reasonable request, as it is just a private arrangement between two parties.The argument is obviously not valid if the transaction is one which is required by law to be in writing such as a transfer of land.For example, if a seller had sold his house in December then the seller could have taken advantage of certain tax benefits.However, he only realizes this in January and so wishes to backdate the document to December.A client or, in the case of an in house lawyer colleague (who for the purposes of this article will also be considered a client), asks you to prepare a document and then your heart sinks as he says “oh and it has to be dated” and gives a date which has already passed.Is it legal to comply with the request or must it always be refused outright?It is legal to backdate a life insurance policy by up to 6 months to help you get the lowest rate allowed for that age.