A more thorough explanation:

Definition: Expense loading is an additional amount added to an insurance premium to cover the insurer's business expenses and contingencies.

For example, if a person buys a life insurance policy with a premium of $1000, the insurer may add an expense loading of $100 to cover their administrative costs and other expenses. This means the total premium paid by the policyholder would be $1100.

The expense loading is a way for insurance companies to ensure they have enough funds to cover their operational costs and unexpected expenses. It is important for policyholders to understand that the expense loading is not a fee or a penalty, but rather a necessary cost of doing business for the insurer.