What is loading in an insurance policy?
Before you are issued a life or health insurance policy, insurers can ask you to undergo a medical test. If you are found to be suffering from any adverse health condition, you could still get a policy but at a higher premium. This hiking of the premium that the insurer does to cover risks is referred to as loading.
In what circumstances is loading done?
Loading can be done in a variety of situations. If you smoke or consume alcohol, the insurer could load your premium over and above the standard level. Loading can also happen due to occupation (hazardous ones), age, lifestyle, gender etc. For instance, some insurers charge a higher premium from men than women because the latter have a longer average life span. Obese individuals may be forced to pay a higher premium on their insurance policies. Those who have mild or controlled forms of hypertension, diabetes, etc may also be subject to premium loading. Residents of bigger cities also usually have to pay a higher premium than those of smaller cities.