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What does premium loading mean in insurance

Have you ever noticed two people of the same age, having similar insurance plans, end up paying different premium amounts? You might wonder why. The answer is “premium loading.” It is the extra amount charged by the insurer over and above the normal insurance premium.

Understanding premium loading can help you understand your insurance costs better.

What is Premium Loading?

Premium loading can be understood as the "Premium Payment" for the extra risk the insurance company bears. If the chances of you claiming the insurance are higher due to any factor, the cost of your insurance will increase accordingly.

For example, a person looking for health insurance who has a family history of heart attack. There is a huge possibility that this person might experience it too. In such cases, the insurance companies charge extra or as it is called "premium loading" amounts for the risk they are covering.

The increased amount above and beyond the standard amount is called as “Premium Loading”, which is charged by insurance companies. This only comes into the picture when the insured person is more prone to risk than others.

However some insurance companies, even after charging premiums do not offer a reasonable claim amount. Contact Bima Seva Kendra for any Insurance claim-related issues.

What are the factors that affect loading?

  • Age:  Age plays a vital role when taking an insurance policy. The more the age the higher the insurance premium, as the probability of medical expense and mortality increases.
  • Tobacco: Especially in health insurance, smoking or other tobacco intake is taken into consideration, while issuing the policy. Insurance premiums for smokers are almost double then non-smokers, as the quality of health is depleted by the consumption of such products. And they are more prone to critical illness.
  • Medical Condition: Your health and medical background also play a crucial role in determining your insurance premium. If you have a long medical history, there is a high chance that you may suffer in future so the insurance premium is higher.
  • Pre-existing condition: People with special medical conditions are likely to claim insurance for medical expenses or treatment. In such cases as well, the premium loading is higher than normal.

Additional Factors

  • Obesity: Insurance companies also consider factors like overweight as obese people are more exposed to hypertension, diabetes etc.
  • Occupation: If you work in a factory or any organization where you are exposed to hazardous substances, the premium loading will be high.
  • Place: The place of residence affects the quality of your life. In some cases, premium loading is applicable considering the air and water quality of that area.


The amount of premium is not just affected by these factors but it also differs from company to company. The term of the policy, the coverage etc are all considered while deciding your premium.

Before finalizing your insurance be mindful of all these factors and if you face any insurance rejection-related issues or insurance claim-related issues, contact Bima Seva Kendra for reliable and expert guidance.