Loading in Health Insurance
Health Insurance

What Is Loading in Health Insurance?

Priya got health insurance coverage from a reputable insurance firm a few years ago. She was quite pleased with the coverage she had for a few years. Moreover, the insurance company quickly reimbursed her claim for the costs incurred when she underwent last-minute heart surgery. However, when her renewal date arrived, Priya was taken aback by a sudden premium increase. She quickly enquired about this. Following her query, she found out that the cause of this abrupt spike was 'loading'. Not heard of this term before? So, let’s explore what is loading in health insurance, loading charges in health insurance, and more.

What Is Loading in Health Insurance?

Health insurance premiums typically are computed based on an individual's age, assuming he or she possesses no pre-existing health conditions. The premium loading is an additional cost added to the base premium based on characteristics such as medical history, poor living behaviours, or even the risky nature of one's profession. Loading simply recognises the increased risk aspect of covering a certain person and accounts for it in the policy's price.

Loading is not meant to be a punishing measure but rather a practical risk-management strategy used by insurance companies. When certain policyholders are more likely to need medical coverage, loading charges aid in ensuring that the insurance provider can cover potential claims while keeping the policy viable.

Types of Loading

In health insurance, loading charges were applied in two ways: initial premium loading and renewal premium loading following a claim. However, with the introduction of the Health Insurance Regulations 2013, it eliminated claim-based loading for all health policies. Let’s see in detail these types:

Initial Premium Loading

When reviewing your application for health insurance, the insurance provider assesses your age, gender, occupation, lifestyle, pre-existing medical conditions, medical history, and other criteria to determine the risk of insuring you. If your insurance provider considers you a risky customer based on these criteria, your insurer may impose an additional loading charge on your premium. This is known as initial premium loading or underwriting-based premium calculation.

Claim-Based loading

Although claim-based loading is eliminated as per the Health Insurance Act of 2013, let’s have a basic understanding of what it is.

When an insured individual makes a claim, the insurer will automatically classify that individual as high-risk and impose loading charges to their health insurance at renewal. This was particularly true for serious diseases such as cancer, which have a significant risk of return and so require recurring claims. However, this method generated a great deal of distress for policyholders, especially those dealing with life-threatening illnesses.

Therefore, the Hospital Insurance Regulations of 2013 were put in place, where an insurance provider cannot change your premium rate for at least the first three years. However, thereafter, it is up to the insurer's choice to impose loading charges on health coverage based on increased health risks, age, and other factors.

However, most reputed insurers stopped renewal claim loading, and rates remain constant regardless of claims, offering relief to policyholders. Furthermore, health insurance companies now also provide a 'Waiver of Premium' advantage to policyholders in specific circumstances, such as the diagnosis of serious or terminal illnesses.

What are the Factors Affecting Loading in Health Insurance?

Insurance companies evaluate a variety of factors when calculating premium costs. These variables influence loading charges in health insurance plans. Thus, a high-risk individual pays a higher insurance rate. The following are various components that influence the health insurance premium, particularly for high-risk individuals:

  • Age

    As you get older, your chances of being hospitalised or incurring medical expenses for illnesses can increase. Considering this, your insurance provider may factor in this and consider adding loading to your base premium, thereby increasing your policy's premium rates.

  • Health Status of the Individual

    Insurance providers consider the policyholder's health status when deciding the premium rate. Here's an example that demonstrates how this affects the premium. The health insurance premium for a group of ten healthy people aged 35 will be the same because the insurance provider assumes mortality to be the same for everyone in the group. However, if one of the ten people in the group has obesity, diabetes, or hypertension, they are liable for higher rates than the other members of the group.

  • Pre-existing Conditions/Diseases

    Applicants with pre-existing diseases or conditions tend to file more claims for hospital expenses. This eventually results in higher medical expenditures and many claims. Since you have a high-risk profile, insurance providers may consider adding a loading to your health insurance premium before providing you with the policy. The proportion of the increase varies according to the insurance company, plan type, policy term, and other factors.

  • Smoking

    Tobacco or nicotine use is regarded as one of the most important factors influencing the premium loading rate. A smoker's premium is higher than that of a non-smoker due to the risk associated with covering the person. Insurers believe that smoking is harmful to one's health and can result in lung infections, cancer, and other serious conditions. As a result, this can lead to higher claims being filed. Therefore, insurance providers may add loading to your insurance, causing the premiums to rise.

Additional Factors Affecting Loading:

Apart from the factors listed above, the insurance provider considers health insurance loading for a number of other factors. Here are some of them:

  • Profession

    If your job is considered to be harmful to your health, the insurance provider might provide a health insurance policy after charging you loading in the premium. This happens because you are seen as a risky customer.

  • Obesity

    Insurance providers consider overweight customers to be more likely to develop conditions such as hypertension, and diabetes that might result in more claims. This prompts insurance companies to consider increasing the premium rates for health insurance.

  • Place

    The cost of your health insurance premium is determined by where you reside. Some areas have a higher premium due to environmental factors, certain health issues, and a lack of nutritious food options. The probability of filing claims for medical care from these areas is considered to be relatively high. As a result, the insurance provider will assess where you live before computing your insurance rate using premium loading.

Difference between Loading in Insurance and Exclusions

As previously stated, insurers often employ loading when they think there is a higher-than-average likelihood of a claim.

However, some insurance companies use the concept of exclusions rather than loading. Exclusions are cases in which a person continues paying the same premium (with no loading charges) under certain conditions.

For example, your health insurance policy might not cover cancer charges or treatments, maternity-related expenses, or injuries experienced while taking part in extreme sports. Following that, you will be unable to submit a claim under these conditions.

Today, many insurance companies allow you to select between exclusion and loading. As a result, you will still obtain comprehensive coverage, although at a higher rate.


As a policyholder, it is critical to review the health insurance benefits and understand the specifics of your health insurance coverage premium. Insurance providers may add loading charges to your premium based on how risky customer you are to them, increasing your premium rates. Lastly, although major health insurance providers aim to provide their customers with competitive premium pricing, features, and benefits, it is the policyholder's duty to compare various health insurance plans and check all policy details before purchasing.


What is loading in health insurance?

Loading is a term commonly used in health and life insurance policies. It is an additional expense applied to the premiums for some risky individuals. These are people who, due to their lifestyle habits, medical history, or nature of work, may be more likely than others to file a claim. Therefore, loading charges are a way to compensate for these higher-than-expected losses.

What are the factors that influence health insurance loading?

There are several factors that may influence the total amount of loading charges applied to your insurance policy:

  • Age
  • Medical status
  • Pre-existing conditions
  • Smoking habits
  • Occupation
  • Residence location
  • Obesity
Would my health insurance premiums stay the same or increase each year?

There are various factors that influence the premium rate. The above-mentioned factors can help you in understanding how they can affect the premium rate.

Will the insurance provider consider increasing premiums while renewing a health insurance policy?

As per the Health Insurance Regulations of 2013, an individual's health insurance premium cannot be modified for at least the first three years. However, post this, your premium may vary on renewal because of loading, depending on the factors mentioned above, including medical history or increasing age.

What is the difference between riders and loading in an insurance policy?

In health insurance, the loading premium is an additional charge from the standard premium. This is due to the inclusion of coverage for diseases such as diabetes, unfavourable medical conditions, and asthma. Riders, on the other hand, provide additional protection for critical conditions at an additional premium.

Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.

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