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Health Insurance is an investment made by many individuals that act as a backup to overcome any unfortunate emergencies that may occur. The crux of buying health insurance is that when any health emergency falls upon, it should not leave us financially handicapped.

It's true that health insurance covers our unforeseen circumstances, but at times, due to certain terms and hidden conditions, it can become an expensive affair with time. One such term is ‘Loading’. 

Understanding Loading with an Example...

Mr. A always pays his premium on time. One day, he has a heart attack and undergoes heart surgery. The insurance company covers the expenses up to a promised limit.

Mr. A is impressed with the swift action of his insurance provider. But surprisingly, at the time of his policy renewal, the insurance company gave him a shock with a higher premium.
This is called ‘loading’. It is an extra amount (combined with premium), which is charged by the insurance provider to cover a risky individual. 

What Are The Factors That Affect Loading?

Below are some of the factors that might affect the amount of loading applied to policy and hence the premium:

  • Policyholder's Age

loading by policyholder ageThe term of insurance, type of plan and the amount are a few factors that affect the premium. However, the age of the policyholder is one of the major factors that determine the premium. This is because the chances of mortality are higher for an older person than a younger one.

  • Medical State of the Policyholder

The medical state of a person is also an important factor when it comes to determining loading. For example, let's take a group of 5 healthy individuals with the age of 40 years each. In this scenario, the premium payable for everyone will be equal as the probability of mortality will be the same. However, if one person from the same group is suffering from diabetes, high blood pressure, or is obese, then (s)he has to pay a higher premium than the rest of the people because there will be a higher chance of health issues and mortality.

In such a situation, the extra amount of premium charged from that person is called Loading.

  • Smoking Habit of the Policyholder

Consumption of tobacco or nicotine is another factor that majorly impacts the amount of loading applied to the premiums. With smoking habits, the premium can turn out to be almost double due to an increased risk of smokers getting sick or dying younger.

Important information: Grace Period in Health Insurance

Additional Factors That Affect Loading Are

  • Type of Occupation
  • Place where the policyholder is residing
  • Obesity
  • Various medical conditions of the insured as well as in the family

Is Loading Justified?

Loading is justified in some cases. Generally, all general insurance companies have set a maximum age (65 to 80 years) for an individual to buy a policy, depending on the insurer. The only logic behind applying this ceiling is the difficulty in determining the risk factor, which ultimately contributes to determining the premium. It often happens that the applicants are already suffering from major health issues such as high or low blood pressure, hypertension, asthma, or diabetes along with bad habits of chewing tobacco and smoking.

Despite having a health ailment or adverse family history, if an insurer is accepting applicants, it would certainly offer the policy on special terms with significant loading.

How is Excluding Different From Loading?

Some insurance policies have "exclusion" in them instead of "loading", which means that the policyholder will continue to pay the same premium, but will have to abide by certain conditions.

For example, if your insurance policy does not include cancer-related expenses or treatments, you will not be able to claim any amount for the same.


The basic idea behind loading is that higher the risk of you making a claim, the higher will be the premium charge. Though every insurance company has its own underwriting guidelines, it is important to read your policy thoroughly, inquire with your insurer about the conditions/percentage of loading, and survey the market well before purchasing any insurance policy.

Naval Goel is the founder of He is an Associate Member of the Indian Institute of Insurance`, Pune. He has been authorized by IRDA to act as a Principal Officer of Insurance Web Aggregator.
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