Loading as a concept, thus, comes into play when an insurance company is dealing with a high-risk candidate, and “is resorted to by insurance companies in cases where the risk to the individual is higher than in ordinary circumstances. This can be due to medical history, a dangerous job, or a hazardous pastime,”
Citing an example, in a group if all applicants are absolutely healthy and all are 45-year old, the probability of mortality for all will be the same and hence the premium will be the same for all the persons in the above group. If, however, one of them is obese, then there is a higher probability of damage to the end organs, like brain, heart and kidney, in this person and hence his longevity will be adversely affected. Here the premium charged to this person will have to be higher than the rest, to be equitable to all. This extra premium collected from the adverse life is called loading – medical loading to be precise.