What is the primary reason for backdating a life insurance policy?

Backdating a life insurance policy primarily serves the purpose of allowing the policyholder to obtain a premium rate that is based on an earlier age. Insurance premiums are often lower for younger individuals, as younger policyholders typically present a lower risk to the insurer. By backdating, the applicant can effectively secure the lower premium rates associated with that earlier age, potentially leading to significant cost savings over the life of the policy.

The option related to decreasing coverage limitations is not correct, as backdating does not inherently change coverage parameters. Similarly, extending the policy period isn't a goal of backdating; rather, it focuses on the age for premium calculation. Backdating also does not eliminate the requirement for medical exams, which are based on underwriting guidelines and the individual’s health status rather than the issue date of the policy. Therefore, the ability to secure a more favorable premium through backdating is the primary motivation behind this approach.