Say you are flying internationally where your cargo limit is capped at 7 kilos. But, since you have packed gifts and souvenirs for your entire family, your cargo weight has gone up to 10 kilos. Hence, during your luggage check-in, you will now be required to pay an extra amount.
You know about this, right?
Well, something similar happens for health insurance policies too. And much like in the case of airport cargo, in the case of health insurance plans too, loading charges are never good news. However, better to stay informed and expectant than be surprised with an additional charge on your health insurance premium.
So, here goes the details on loading charges in health insurance - how it works, what factors affect it, and what are some of the health insurance plans that come without loading charges. Read on!
What are Loading Charges in Health Insurance?
Loading charges in health insurance plans is the extra amount that is added over and above the premium amount for a particular person depending his health profile. This amount is dependent on the claim risk that the insured individual projects for the health insurance provider.
The health insurers take into account the “risk” factor of the individual (that may include age, medical history, hazardous occupations, and more) and arrive upon a customised sum that is then added to the premium during the purchase of the policy or health insurance renewal.
To know how health insurance providers determine the loading charges, you need to know what factors sway the charges. Take a look -
What factors determine the loading charges in health insurance policies?
- Medical history
- Health insurance providers, when deciding upon the loading charge for a health insurance plan, look into the detailed medical history of an individual. This helps them
- Gauge their family history regarding any genetic diseases that the patient might acquire later on in their lives,
- Analyze the frequency of past hospitalisations.
- Compute the number of hospitalisations that fetched health insurance claims.
Based on this detailed history, the insurer accordingly decides upon a loading charge. They charge higher if the medical history reflects health complications, repeated hospitalisations, and frequent visits to medical facilities.
- Body Mass Index (BMI)
Body Mass Index or BMI is a crucial deciding factor for health insurance providers when calculating loading charges in policies. BMI is usually considered indicative of the existing medical condition of an individual and their probable future health issues. The BMI of any individual ranges from 18 to above. And based on the score, a health insurance plan is accepted, rejected, or accepted with loading charges.
| BMI | 18 - 29 | 29 - 35 | More than 35 |
|---|---|---|---|
| Policy Approved/Rejected | ACCEPTED | ACCEPTED with an extra loading charge that suggests hiked premium. | REJECTED (More BMI is indicative of higher payout chances over increased frequency and of hospitalization) |
- Pre-existing medical conditions
When potential individuals with certain pre-existing ailments approach health insurance providers, any of these cases might occur -
CASE 1: Their applications get outright rejected because insurers are reluctant to offer coverage for specific ailment treatments.
CASE 2: Their applications do get accepted with or without a disease-wise capping on the pre-existing ailments.
CASE 3: Their applications get accepted with a loading charge and with/without a disease-wise sub-limit.
Among the cases mentioned above, the last option seems the most acceptable, considering that the individual gets to avail of a health insurance plan despite their pre-existing ailments. Considering how expensive medical procedures can be, insurance plans become a financial security net while catering to medical requirements. And that’s why individuals avail of health insurance policies.
And here’s where loading charges come to the rescue. In exchange for a spike in health insurance premiums, individuals get coverage for a much higher amount over hospital bills/invoices. And thus, an individual whose pre-existing disease could have gotten him/her rejected by any health insurance provider now has coverage to act as a financial umbrella during rainy healthy emergencies.
Why loading charges in health insurance plans considered crucial?
First of all, let’s clear this out - yes loading charges cause a spike in health insurance premiums. And yes, this can cause a financial burden for an insured individual.
However, Loading charges in health insurance policies -
- Allow individuals with pre-existing ailments to have a health insurance plan. Sans this, there are high chances of rejection of plans, in such cases.
- Safeguard health insurance providers financially over higher premiums in cases of high payout risk insurance candidates.
What are the best health insurance plans without loading charges?
While a majority of health insurance policies across the industry have a loading charge provision in place already, there are still a few plans that come without these charges.
| Best Health Insurance Plans | Loading Charges | CoPayment | Disease Wise Sub-Limits |
|---|---|---|---|
| CARE - Care Plus | ❎ | ❎ | ❎ |
| CARE - Care Advantage | ❎ | Mandatory if the insured is above 60 years. | ❎ |
| CARE - Care | ❎ | Mandatory if the insured is above 60 years. | ❎ |
| Care - Care Freedom Plan | ❎ | < 70: 20% >70%: 30% |
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(However, please note - policies without loading charges don’t necessarily indicate that those policies should be preferred over others. So, it’s better if you would reach out to a health insurance expert, or go ahead with a free health insurance comparison calculator to find a plan that best caters to your medical and financial goals.)