Expense Loading is the amount charged to cover each policy's share of expenses of operation.

Expense Loading is the amount charged to cover each policy's share of expenses of operation.

• A. The portion of premium that funds the benefits paid.
• B. The tax deducted from premium.
• C. The deductible portion.
• D. The amount charged to cover salaries, commissions, and cost of doing business.

Answer: (C)

Expense loading represents the portion of the premium added to cover the insurer’s operating costs—salaries, commissions, and other overhead needed to run the business. It’s separate from the amount that pays benefits to policyholders (claims) and from taxes or the insured’s deductible. The deductible is the amount the insured pays before benefits begin, not an operating expense of the insurer. So the description that fits expense loading is the charge to cover salaries, commissions, and the cost of doing business.

Expense loading represents the portion of the premium added to cover the insurer’s operating costs—salaries, commissions, and other overhead needed to run the business. It’s separate from the amount that pays benefits to policyholders (claims) and from taxes or the insured’s deductible. The deductible is the amount the insured pays before benefits begin, not an operating expense of the insurer. So the description that fits expense loading is the charge to cover salaries, commissions, and the cost of doing business.