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I am looking to buy LIC policy and seleted one to cover my life. My agent suggested me to pre-dating the policy start date, he try to tell me that it is called as backdating in LIC, but this is still not fully clear to me. I wants to know two things -
1- Is it legal in India?
2- As I am saving premium, should I go for this?
Thanks,
VarunD
Backdating refers to the practice of pre-dating the time at which the policy-holder bought the policy. Suppose Sanjay buys a policy on June 14.
The policy is said to have been backdated if the insurance company and Sanjay (parties to the contract) together agree to officially show that the policy was purchased on, say, January 14.
Backdating is legally permissible, and is used to lower the premium commitment or time the incidence of outflow.
Just to add -
A policy can be backdated up to the first day of the accounting year in which the policy is purchased, that is, If a policy bought any time in April 1, 2008-March 31, 2009 can be backdated up to April 1, 2008 and not beyond.
Your age is calculated as per nearer B' Day. If you date back your policy then your age would be taken as per nearer B'day. So the premium will be reduced.Quote:
Originally Posted by VarunD
Note -
DATING BACK CAN BE ALLOWED ONLY WITHIN THE SAME FINANCIAL YEAR WITH SIMPLE INTEREST.
TODAY IS 25th MAY 2009 IF POLICY HOLDER CAN ALLOW DATE BACK FROM APRIL 1st TO 24th MAY 2009.
Reason for Backdating in LIC is -
THERE ARE MANY POLICYS IN THE MONTH OF MARCH. POLICY SERVICE IS VERY DIFFICULT SO, DATEBACK TO JANUARY OR FEBRUARY.