Loading in Health Insurance: How Charges Impact Your Premium

What does Loading Mean in Health Insurance?

When you buy a health insurance policy, your insurance provider factors in several factors. This includes your age, gender, and overall health. Loading in insurance refers to additional charges included in the premium. Apart from family history, pre-existing illnesses, the nature of work, and even lifestyle habits can also increase the premium.

In Lata's case, her family history of diabetes and heart disease put her in the high-risk customer category. Supposing her base policy was ₹12,000 per year and the loading charges were 25%, she would have to pay ₹15,000 per year.

Keep in mind that loading charges in health insurance are not random. They are calculated in accordance with underwriting guidelines and medical disclosures.

Key Factors that Impact Health Insurance Loading

When you want to buy a health insurance policy, there are so many aspects that you need to keep in mind. Mostly, the premium is the highest on this list. To understand how premiums are affected, let us take a closer look at the factors that impact the loading amount in health insurance:

Your Age

After the type of coverage you choose, the next thing that affects the premium is your age you are in. Younger people are considered to enjoy good health, and typically, the younger you are, the cheaper your plan. As you age, your vulnerability to age-related illnesses increases, thus increasing loading charges.

Your Medical Health

Your medical condition and history can also significantly increase the loading charges in health insurance. People who are suffering from an illness like diabetes, asthma, arthiritis etc may have to pay a higher coverage. This is why if you have a pre-existing illness, you can expect a higher premium.

Lifestyle Habits

Yes, your lifestyle can greatly affect the loading amount in health insurance. People who smoke have to pay much higher premiums than those who don’t. Smoking, as you would already know, can be the cause of various health issues such as cancer. Lung infections and others, making smokers high-risk individuals.

Other Factors that May Increase Health Insurance Loading

Apart from the above elements, other important factors can also raise your health insurance premiums. This includes:

1. If your occupation is physically challenging and involves difficult or dangerous activities, your health insurance premium will be higher.
2. People who live in high-risk zones, due to natural or man-made reasons, need to pay additional loading charges.
3. As seen above, your family medical history also affects your premiums.
4. Another common factor is your Body Mass Index. A higher BMI makes a person more inclined towards illnesses and health issues.
5. Your claim history can also affect the premiums. People with frequent or high-value claims in previous policy years would also have to pay loading.

Loading vs Exclusions in Health Insurance Policies

Understanding the components of your health insurance policy is important. There may be some confusion between loading and exclusions. The table below will help you know the differences:

Is Premium Loading in Health Insurance Fair?

When exploring health insurance, the question, “Is leading in health insurance fair?” may come to mind. From the point of view of a policyholder/ insurance seeker, loading can feel unfair, especially for people who are already dealing with health issues. But if you look at loading from an insurer’s perspective, you will realise that loading is about risk balancing.

Insurance is all about sharing the risk. People who are in the high-risk category will have to bear the additional charges.

Conclusion

Health insurance today is nothing less than a basic necessity. If loading charges are making you rethink buying a health insurance plan, you’re probably taking the wrong approach. Health insurance comes to your rescue when life takes an untoward turn. Being caught off guard, without coverage, can be a costly mistake.

By paying a little extra, you can ensure that, in the event of a medical emergency, your treatment/ hospital visits are financially manageable. Rather than worrying about high hospital bills, you can focus on your recovery. Also, loading charges in health insurance are transparent and in line with underwriting norms. Also, in some cases, insurance companies review and reduce loading after a few claim-free years or once your health parameters stabilise.

If you feel that loading is excessive or unjustified, you always have the option to explore different health insurance policies. Jio Insurance Broking makes this comparison easy and straightforward.

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