New York State Life Insurance Exam Questions Practice Question
For what purpose is a life insurance application backdated?
Correct Answer: A
Rationale: Backdating a life insurance application is primarily used to reduce the premium. By setting an earlier effective date, the policyholder can lock in a lower premium based on their age at that time, which may be more favorable than their current age.
Option B is incorrect as backdating does not affect the face amount of the policy; it only influences the premium. Option C is misleading; while health status is relevant, backdating does not directly protect it but rather locks in rates based on the applicant's age. Option D is also incorrect because backdating does not facilitate additional underwriting; it simply establishes a prior date for the policy’s effective coverage.
Unlock All Questions
Subscribe to Premium for full access to all practice questions, detailed rationales, and performance tracking.
Subscribe Now