Most insurers and financial experts believe that loading is justified in many cases to protect both the insurer and the customer.
For insurers, it provides more security against losses for individuals who may be at a higher than anticipated risk of making medical claims. And, from a customer point of view, it allows such people with a higher risk factor to get a more comprehensive insurance cover.
This includes those above the age of 65-80 years, as well as those suffering from major ailments like hypertension or diabetes, history of major surgery, adverse family history, or with bad habits such as smoking. Thus, by taking all these factors into account while calculating a person’s premium, insurance companies make it easier for those customers who are less prone to risk.
For example, let us look at two people who have the same insurance coverage, but one of them has a higher health risk. Without loading, they would both pay the same premium, which would be unfair to the low-risk individual who would end up paying more.
However, there are also cases where loading is not justified, such as when it is applied to individuals after a procedure that is easily treatable and with a low risk of further complications. For instance, individuals with a history of surgeries like cataract or hernia.