Which option best describes when a policy is backdated?

• A. The premium is reduced
• B. The policy's effective date is earlier
• C. The issued date is later
• D. The death benefit is increased

Answer: (B)

Backdating means dating the policy as if it were in force earlier than the actual application date. This lets the insurer use the insured’s younger age for underwriting, which often lowers the premium. So describing backdating as the policy’s effective date being earlier is the best fit. The other ideas don’t define backdating: it isn’t about directly lowering the premium by itself, it isn’t about a later issued date, and it doesn’t involve increasing the death benefit.