Buying a back-dated insurance policy? While it's legal to purchase an insurance policy with a back date, remember that it may not always be beneficial for the buyer

Wouldn’t it be great if you could turn the clock back? You could make a lot of money by investing in the right stocks. While you can’t go back in time when it comes to stock investments, you can buy certain lifeinsurance policies with a back date. Back-dating of a life insurance policy is a perfectly legal and standard practice in the insurance industry. So, the new plans launched by insurance companies in the past 1-2 months can be bought with any date in the financial year starting 1 April 2013.  Is back-dating useful?  Back-dating is useful in certain situations. A life insurance policy is not the best way to save tax and there are better, more flexible and lucrative options to do so. Even so, millions of taxpayers buy life insurance to save tax. If a taxpayer needs to exhaust his Section 80C limit through a life insurance policy this year but wants to pay the premium on a monthly or quarterly basis from next year, he will find back-dating useful. He can pay the premiums for this year at one go, and from next year, he can pay them whenever they are due.      It is also useful in case the buyer has just crossed the minimum age for buying a certain policy.      There are also sentimental reasons for back-dating. Sometimes, buyers want their insurance policies to be issued on an important date during the year. It could be a birthday, wedding anniversary or any other date with emotional value. This also ensures that the maturity of the policy coincides with that important date. It also sets a reminder for the premium.  Look before you leap  Going back in time also reduces the waiting period for the policyholder. If you buy a money-back policy in March 2014, you will get the first tranche (which is 20% of the sum assured) after five years in 2019. However, if you back-date the policy to April 2013, you will get the money in four years and one month, in April 2018.      Before you are led into believing that this is a great way to get your money back faster, do the math. The next premium becomes due in a month in April 2014. Also, you are charged a 10% interest on the premium you pay for the back-dated policy. “It makes little sense to pay 10% interest on a policy that earns you only 6-7%,” says a Delhi-based insurance expert.      If the back date is more than one month away, the buyer is charged a 10% annual interest on a pro-rata basis. So, if you want to back-date a policy by three months, be ready to pay an interest of 2.5%. The Anand Money Back package, a combo of two money-back plans and an endowment policy, being hawked by LIC agents, has one plan dating back to April 2013. The premium will be due next month.      Incidentally, the interest on the back-dating kicks in only after 30 September. Till this cut-off date, the LIC does not charge any interest even if the policy is back-dated by 5-6 months. There is also no charge if the back-dating is for less than a month.  Zero sum game  Insurance agents use back-dating to lure buyers. Insurance companies base their premiums on the policyholder’s age. LIC, for instance, goes by the last birthday of the buyer. If the policy dates back to before your birthday, the premium will be lower. However, this is a zero sum game. In your quest for a lower premium rate, you will end up paying extra premium. This is why back-dating works only in endowment and money-back plans. Back-dating a term plan is an exercise in futility because the coverage for the entire back-dated period effectively goes waste.

Brutal Arctic blast leaves 187m shivering in US At -16°C, NY Breaks 118-Yr-Old Record Of Lowest Temperature

New York: A deadly blast of arctic air that shattered decades-old records as it gripped the middle US moved eastward on Tuesday, cancelling thousands of flights, paralysing road travel and closing schools and businesses. 

    Forecasters said some 187 million people could feel the effects of the "polar vortex" by the time it spreads across the US. New York's Central Park 
hit a record low temperature for the day of -16°C, shattering a 118-year-old record, but with winds gusting to 51kmph conditions felt far colder, according to the US National Weather Service. The cold broke records in Chicago, which set a local record on Monday at minus -27°C, and elsewhere. 
    Shelters for the homeless were overflowing due to the severe cold brought by a polar air mass that produced the coldest temperatures in two decades and at least four deaths. 
    Temperatures were expected to be 14°-19° celsius below normal from the midwest to the southeast, the National Weather Service warned. 
    After running into unpassable snow and ice, three Chicago-bound Amtrak trains came to a halt on Monday afternoon, stranding more than 500 passengers overnight. They had heat, water, lights and toilet facilities, according to Amtrak. As of Tuesday morning, passengers on two trains, which spent the night on the tracks in Bureau County, Illinois were being transported to Chicago by chartered bus, an Amtrak spokesman said. More than 15,000 customers in Indiana remained without power. 
    In the normally mild south, Atlanta recorded its coldest weather on this date in 44 years, when the temperature dropped to -14°C. Wholesale electricity prices in the central and eastern US spiked far above their normal seasonal level as homes and businesses needed to use more energy to warm buildings. 
    The deep freeze snarled many Americans' morning commutes with icy or closed roads and flight delays on Tuesday, with some 1,987 US flights cancelled and roughly 1,028 delayed, according to FlightAware.com. Major US cities from the midwest to the east coast were in the grip of temperatures below freezing, with Chicago at -23°C, Detroit -24°C, New York -14°C, Washington -13°C and Boston -11°C. AGENCIES 
Oil prices shoot up 
    The price of oil rose to near $94 a barrel on Tuesday as unusually cold weather in the US was expected to fuel demand for energy. By mid- afternoon in Europe, benchmark US oil for February delivery was up 42 cents to $93.85 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract fell 53 cents to settle at $93.43 a barrel. AP

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