What does Hidden Load mean?

Hidden Load is represented by a fee the contracting party actually pays for, without knowing it. Usually, this fee is never annotated, so that most of times policyholders pay a certain fee which they are not actually aware about. These fees usually have a covert aspect within the contract’s fine print, which is on purpose so that it will not attract the attention of the buyer.

Hidden Load explained

A very good example of such a hidden load is the 12b-1 fee, which is a fee the contracting party pays for without actually realizing it. It is a fee pertaining to mutual funds contracts, and does usually not exceed 1% and the fee is aimed towards the funding of the publicity material of the company most of the times. Although almost unobservable, it is still an expense which the contract holder pays for.