Backdating a life insurance policy means the policy's effective date is earlier than the issue date.

• A. Making the policy effective on an earlier date than the present
• B. Making the policy effective on an earlier date than the issue date
• C. Cancelling the policy retroactively
• D. Changing the insured name

Answer: (B)

Backdating a life policy means the policy’s effective date is set to an earlier date than the issue date. This is done so the premium can be based on the insured’s younger age at that earlier date, which can lower the cost. The key idea is the relationship between when the policy is issued and when it becomes effective—the effective date must come before the issue date.

If the date is simply earlier than today but not tied to the issue date, that isn’t the standard definition of backdating. Cancelling the policy retroactively describes rescission, which voids the contract as if it never existed. Changing the insured’s name is a separate change to policy information, not a dating issue.