Loadings explained

When an underwriter concludes that your risk of claiming is higher than the standard population but still acceptable, the ordinary response is a loading. The insurer accepts you, gives you complete cover, and charges more for it. Expressed as a percentage, a 50% loading means you pay one and a half times standard rates; a 100% loading means double; a 200% loading means triple.

Loadings are not punishment and they are not arbitrary. They come out of rating tables built on claims experience, mapped to whatever factor is driving the assessment. Two insurers reading the same file can reach different numbers because their tables and their reinsurance treaties differ, not because one of them is being unfair.

There are two shapes of loading worth distinguishing. A permanent loading applies for the life of the policy. A temporary loading applies for a set number of years and then drops away automatically — commonly used where the risk is elevated because an event was recent and is expected to normalise. Ask which you have been offered, because the total cost over twenty years is very different.

These are the categories that most often result in extra premium rather than an exclusion or a decline. The level applied depends on severity, control, how recent it is and what other factors sit alongside it.

• Build — a body mass index outside the insurer’s standard band, which is one of the most commonly loaded factors in the market.
• Blood pressure or cholesterol that is treated but not fully at target, or is recently diagnosed.
• A controlled chronic condition such as diabetes, where the loading tends to track how long it has been diagnosed and how well it is documented as controlled.
• Alcohol intake above the insurer’s threshold.
• Some hazardous pastimes, where an insurer prefers to charge for the risk rather than exclude the activity.

Getting a loading reviewed

This is the part most people never do. Many loadings are applied because of something that can change — weight, blood pressure, how recently a condition was diagnosed, how long you have been stable. Insurers will generally consider a review, but only when asked, and only with evidence.

1. 1Wait until there is something to show. Twelve to twenty-four months of documented change is the usual minimum.
2. 2Gather the evidence yourself: recent GP measurements, current medication, recent test results, a specialist letter confirming stability.
3. 3Ask your adviser to write to the insurer requesting a review of the loading, attaching the evidence.
4. 4The insurer reassesses on current underwriting rules — which may be more or less generous than when you applied.
5. 5If it declines to reduce the loading, ask what specific evidence would change its view, and diarise it for another year.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Whether the loading is permanent or temporary, and if temporary, exactly when it ends.
• Whether it is expressed as a percentage of premium or as a flat amount per $1,000 of sum insured.
• Whether the loading applies to every benefit on the policy or only to the one the condition affects.
• Whether the insurer has a stated process for reviewing loadings, and what evidence it wants.
• Whether a competitor would take the same history at standard rates, which is only knowable by asking several.

Every New Zealand insurer writes loaded policies to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• Loading tables are not public. An adviser who places business across the market has a working sense of which insurer rates a given history most kindly.
• Where two insurers both load, the percentages can differ enough to change which policy is cheapest overall despite different base rates.
• An adviser can ask for a reconsideration with better evidence before you accept an offer, which is far easier than changing it later.
• For a review years later, an adviser knows what the insurer needs to see and how to frame the request.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.