What is a loading or exclusion?
A loading is when a person pays an increased premium for the same cover, due to them being a higher risk to the insurance company. For example a person with diabetes is a higher risk individual who pays an increased premium but still has the same amount of cover as someone without diabetes. Another example could be someone who drives long distances as part of their job. Due to being on the road much more than the average person, they are usually seen as a higher risk, and therefore pay an increase premium for the same cover. An exclusion is when an insurance company finds that a risk factor is too great for them to cover, and instead of rejecting the whole policy, or loading the premium too excessively, they may apply an exclusion on the high risk factor. For example someone who has a hazardous hobby such as an amateur skydiver, could chose to rather accept an exclusion for skydiving on their life cover policy, as they skydive very rarely and do not see it as a risk.
