In life insurance, what is the term for the amount above the actual risk premiums that the insurer charges?

The amount above the actual risk premiums that the insurer charges is known as loading. This term refers to the additional costs that insurers incorporate into the premium, accounting for various expenses such as administrative costs, marketing, and profit margin. Loading ensures that the insurer can cover its operational expenses while still providing the necessary coverage.

In the context of life insurance, loading is an essential component, as it allows the insurer to manage the risk associated with underwriting policies and to ensure financial stability. By understanding loading, policyholders gain insight into how premiums are structured and what contributes to the overall cost of their insurance coverage.