For the most part, life insurance premiums increase as you get older.  So having an insurance age change during underwriting is most likely going to result in a higher final premium when the policy is issued.  To prevent this change in premium, a policy may be backdated to save the previous age of the applicant.  Here's how it works:

• Example 1 - Without Backdating

Original Quote = $300.00 annually

Final Premium = $325.00 annually

The final premium is now $25.00 higher annually due to the age change.  Over the course of a 20-year term policy, this would result in an additional cost of $500.00 to the policy owner.

•  Example 2 - With Backdating

Original Quote = $300.00 annually

 Final Premium = $300.000 annually

This policy was backdated with a policy date of July 15, 2006, which is one day prior to the applicant's age change.  This resulted in keeping the issue age of the policy at 30 and the premium at the original quote of $300.00 annually.

Backdating this policy would result in a savings of $500.00 over the course of the next 20 years.  However, in doing so, the policy owner must pay for coverage for a period of time in which there was no coverage in place (July 15 to August 15).  This is the opportunity cost of backdating and in this case the amount is equal to approximately $25.00.  There is obviously a positive tradeoff for the policy owner in this case. Backdating the policy to age 30 would result in a net savings of $475.00 over the term of the policy.

Depending on the circumstances, it may not always be best to backdate a policy.  QuickQuote's Account Managers and Case Managers work closely together to identify backdating opportunities and present the associated advantages and disadvantages to applicants.  Our objective is to help customers decide the best course of action to take for saving money on their life insurance policies.

Life insurance companies generally use one of two methods for determining an applicant's insurance age for the purpose of issuing a life insurance policy.

1.      Actual Age

The first method of age calculation is called Actual Age (sometimes referred to as Age Last Birthday).  This method calculates your insurance age based on your last birthday.  Let's look at a couple of examples:

• Example 1

Your Date of Birth	May 1, 1950
Today's Date	April 30, 2006
Your Insurance Age Today	55

• Example 2

Your Date of Birth	May 1, 1950
Today's Date	May 2, 2006
Your Insurance Age Today	56

The Actual Age calculation method is very straightforward as it is simply a measure of an applicant's calendar age on any given date.

2.      Age Nearest Birthday

The second method of age calculation is called Age Nearest Birthday.  This method calculates your insurance age based on your nearest birthday, which could be either your last birthday or your next.  Here's how it works:

• Example 1

Your Date of Birth	May 1, 1950
Today's Date	May 2, 2006
Your Insurance Age Today	56

• Example 2

Your Date of Birth	May 1, 1950
Today's Date	November 2, 2006
Your Insurance Age Today	57

Example 2 shows us the significance of the Age Nearest Birthday calculation method.  Your insurance age in Example 2 is 57 because on November 2nd, you are actually closer to your next birthday (your 57^th) than you are to your last birthday (your 56^th).  So even though you have not yet turned 57 by the calendar, this method of calculation determines your insurance age to be 57.  This will happen every year on the day you move to within six months of your next birthday.

Most life insurance companies use the Age Nearest Birthday method for age determination.  QuickQuote's quoting system is designed to provide an accurate quote based on your date of birth, taking into account each individual company's quoting method.

However, by the time your policy is issued, your insurance age may be different than it was when you received your original quote.  This will depend on whether you had a birthday or moved to within six months of your next birthday during the underwriting process.  In either case, it may be possible to have your policy backdated to keep your Insurance Age down.