When is an applicant required to pay premiums if the application is backdated?

The correct answer states that the applicant is required to pay premiums from the original policy effective date to the present when the application is backdated. This is because backdating a policy is a practice that allows the coverage to begin earlier than the actual application date, which can be beneficial in certain situations, such as securing a lower premium rate based on the insured's age at the time of the original effective date.

By backdating, the insurer is essentially treating the policy as if it was in effect from the earlier date. As a result, the applicant must pay premiums that correspond to that earlier effective date, ensuring that the company receives the appropriate compensation for the risk they are covering from the start of the policy period, not just from the application date. This ensures that both the insurer and the insured are in alignment regarding coverage and risk during the backdated period.

In sum, because the contract effectively starts at the original effective date, premium payments are required from that time onward, reflecting the coverage provided from that earlier time until the present.