Mr. Mehra made a wise decision to purchase health insurance well in time and so when he was advised heart surgery by his cardiologist, he had no reason to worry. His insurance policy provided him with the financial support that he needed during the surgery so he did not have to compromise on the health care facilities that were essential. His claim was settled quickly and he was well on his way to recover fully. However, to his surprise, when he was renewing his policy, the premium amount seemed higher and on discussing further with the insurer, he was informed that the reason behind the increased premium was ‘loading’.
What is loading and the factors that cause loading in your insurance policy.
Loading is an insurance term that means a certain additional amount that is added to your insurance premium if the applicant is prone to risks and losses basis a number of factors. Loading majorly applies to health and life insurance.
Age is among the top factors considered when determining the premium and loading in a health insurance policy. This is because as an individual ages, their chances of being diagnosed with an illness, hospitalisation and thereby requirement of assistance to cover medical expenses increases. So, the premium amount to get the same coverage will be higher for a 30-year-old than for a 25-year-old.
- Overall health condition
Another important factor is the health of the insured person. In case the insured person has a surgery in the recent past or has a history of a serious illness or medical issue, loading may be applied to the policy upon renewal, resulting in an increased premium price.
- Pre-Existing health issues
When a person suffers from, or is diagnosed with a medical condition even before they purchase insurance, it is defined as a pre-existing disease. When buying health insurance, it is essential for individuals to declare any pre-existing diseases that they may have to avoid any issues in the event of a claim. However, this means that they will likely have to pay a higher premium amount as compared to people with no pre-existing health issues, even if they are of the same age group.
In this case, loading is applied because when someone has a pre-existing condition, they may file frequent claims for hospital expenses as well as higher medical bills making them “high risk” individuals from the point of view of an insurance company.
- Hazardous habits
Any habits that are hazardous to ones health has a major impact on the loading of health insurance premiums. Whether it is about smoking or chewing tobacco, there is a higher risk of covering a person, as the chances of fatal diseases like cancer, lung infection, and other critical illnesses increase drastically. In fact, health insurance premiums for smokers can be almost double as compared to non-smokers of the same age.
Some more factors that may affect the premium on your insurance policy
- Job profile – If you have a hectic work schedule, which may eventually affect your health, then the insurer may end up offering you a higher premium on health insurance
- Obesity – Insurance companies consider overweight individuals more prone to diseases such as diabetes, thyroid, hypertension, etc.
- Family’s medical history – If your direct family members (like parents or grandparents) have a history of illnesses like heart disease, cancer, Alzheimer’s, etc., you may be at a higher risk of having these illnesses. And thus, insurers will consider offering you a higher premium amount on your insurance policy.
Loading in premium amounts in a health insurance policy depends on various factors, some of them even dependent on the applicant being transparent about their health. Applicants must remember that it is extremely important to give the insurer accurate information even at the cost of having a higher premium to avoid any claim related issues when the need arises.
We hope you now have a clearer understanding of loading in a health insurance. To be able to check benefit rich health insurance plans and calculate your premium for each, login to the Bajaj Finserv App.
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The Bajaj Finserv App is a high utility app that takes care of all your financial needs including insurance. On the app, you can explore health insurance plans from our trusted partners. Here you can view product features, compare prices, and purchase a plan that is best suited to your needs. All this in a matter of minutes on our 100% digital platform and from the comfort of your home. It truly is becoming the new way to buy insurance.