Your age will impact how much your life insurance costs. The younger you are, the cheaper life insurance is.
If you’ve been putting off buying life insurance, there’s a good chance your age has changed and your rates are getting more expensive.
Sometimes, life insurance companies will allow you to save age by rewinding the date on your life insurance policy, also known as saving age.
In this guide, we’ll explain how saving age has the potential to save you money on life insurance.
What Is Saving Age?
Saving age is when you backdate your policy to lock in rates for a younger age and save money on life insurance premiums.
You cannot backdate years and years. Typically, insurance companies will allow you to backdate up to six months. Although you’re only “saving” one year of age, the cost savings over time can be significant.
How Does Saving Age Work?
The date you get quotes, the date you apply, and the date your coverage begins are likely different. It’s very possible that during this time, your age changes in the eyes of the insurance company.
Your age may change in the eyes of the insurance company for two reasons:
- You had a birthday
- Your next birthday is less than 6 months away.
Nearest Age vs Actual Age
When you apply for life insurance, and your application goes through the underwriting process, insurers use one of two methods to determine how old you are: actual age or nearest age.
- Actual: Insurers use your current age to underwrite your application.
- Nearest: Insurers use your age from the birthday you’re closest to within six months, even if it has yet to happen.
For example, if your birthday is April 1st and you’re approved for coverage at age 39 on January 1st to an insurer who uses nearest age, your policy paperwork will say you’re 40.
How Backdating Works
If you apply for life insurance and a birthday or your nearest age increases your rate, many insurance companies will allow you to backdate your policy.
When you backdate to save age, the insurance company will issue your policy using an earlier date versus the actual date. There are advantages and disadvantages to this.
Advantage of backdating: You can save a significant amount of money over the life of your policy.
Disadvantage of backdating: You must pay for coverage starting from the date of the backdated policy, which means you pay a larger amount upfront. This also means you’re paying for a few months in which you technically didn’t have coverage, and your policy will be shortened by those months.
Example:
Jane is 40 years old and shopping for life insurance. On December 1st, she gets a monthly quote of $40.55 for a 20-year $1,000,000 term life insurance policy.
Life happens and she gets busy and puts off applying. In March, she finally remembers to apply. Her 41st birthday is July 1st.
The life insurance company approves her application March 30th but because July is less than six months away from March, her age is considered to be 41 and her rate is now $45.16.
She requests that the insurer backdate her policy to December 31st, one day before her sixth month birthday. Doing this allows her to lock in the $40.55 monthly premium. However, she will need to back-pay premiums from December even though she’s given the policy in March.
So, in order to activate her coverage on March 30th, Jane pays the three months’ back pay of $121.65 plus her first month’s premium of $40.55.
By backdating, Jane’s policy costs $486.60 every year. Had she not saved age, her policy would cost $541.92. Backdating saves her $55.32 each year of her 20-year term policy.
| Without Backdating | With backdating | |
|---|---|---|
| Monthly Rate | $45.16 | $40.55 |
| Back-Pay Required | $0 | $121.65 |
| Total Cost for Year 1 | $541.92 | $608.25 |
| Total Cost of Coverage after 20 Years | $10,838.40 | $9,853.65 |
See what you’d pay for life insurance
Should You Always Backdate to Save Age?
Backdating is not required, but it’s a wise choice if it will save you money. Sometimes the trouble isn’t worth it. Not all birthdays cause a significant rate increase.
For example, a $250,000 20-year term policy for a healthy 31-year-old woman will cost approximately $11.00 each month. If she waited and applied at her nearest age of 32, the same policy would cost $11.14. Saving $1.68 each year isn’t worth the fuss or additional back-pay that would be required.
Your agent can help you determine whether backdating to save age would save you money.
Learn more about different life insurance policies and their average monthly costs.
Get a Free Quote to Find Your Best Policy and Price
Your age is one of the most significant factors that impact life insurance pricing. Get life insurance as soon as you realize you need it. You never know what tomorrow will bring. Protect your family today.
We don’t expect you to know which life insurance companies use nearest or actual age. When you run a life insurance quote on Quotacy, we always ask for your date of birth before showing you your options. Our quoting tool considers the age system each carrier uses, so you’ll always see prices that reflect what they’ll offer you.
Once approved, your Quotacy agent will ask if you want to backdate if it can save you money. In many cases, one year won’t make a huge price difference, but if it saves you money, we will help you with the saving age process.
Note: Life insurance quotes used in this article are accurate as of March 29, 2023. These are only estimates and your life insurance costs may be higher or lower.
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