Loading
A loading is an additional premium charged by an insurer when they determine there is a higher level of risk associated with providing your insurance cover.
When you apply for insurance, the insurer assesses your individual level of risk through a process called underwriting. If they believe you're more likely to make a claim because of factors such as your health, occupation or lifestyle, they may apply a loading to your premium.
A loading doesn't reduce the benefits of your policy. Instead, it increases the amount you pay to reflect the additional risk the insurer is taking on. For example, a person with well-managed asthma, a history of high blood pressure or someone working in a higher-risk occupation may receive a loading rather than having that condition excluded from their cover.
The amount of a loading varies depending on the insurer and your individual circumstances. In some cases, a loading may be temporary and can be reviewed if your health improves or your circumstances change. Other loadings may remain in place for the life of the policy.
Receiving a loading isn't necessarily a bad outcome. In many cases, it allows you to obtain insurance cover that might otherwise have been declined, giving you valuable financial protection when you need it most.
Why It Matters
Understanding how loadings work can help you make informed decisions about your insurance. While a loading increases your premium, it may also allow you to keep cover for conditions or circumstances that could otherwise limit your protection.
Common Misunderstandings
"A loading means my application has been declined."
No. A loading means the insurer is willing to provide cover but has adjusted your premium to reflect a higher level of risk.
"A loading reduces the amount I can claim."
No. A loading affects the cost of your premium, not the amount of cover provided under your policy.
"Every insurer will apply the same loading."
Not necessarily. Each insurer has its own underwriting guidelines, so decisions and premium loadings can vary.
"A loading will always be permanent."
Not always. Some loadings may be reviewed if your health or circumstances improve, depending on the insurer.
FAQs about Loadings
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A loading is applied when the insurer assesses that your risk is higher than average based on factors such as your health, occupation or lifestyle.
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Sometimes. Some insurers will review a loading if your circumstances change or your health improves.
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It depends. In some situations, paying a higher premium may be preferable to having a condition excluded from your cover.
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Possibly. Underwriting decisions vary between insurers, which is why comparing options can be beneficial.
Being offered insurance with a loading doesn't necessarily mean you've received the best or only option available. If you've been offered cover with a loading or would like help understanding your underwriting decision, talk to a New Vision Financial Services adviser. We'll help you compare your options and find the cover that's right for you.