Group insurance is a type of insurance coverage that is designed for a group of individuals, typically employees of a company or members of an organization, under one master policy. Rather than issuing an individual policy to each person, the insurer provides coverage to all eligible participants under a single contract. The primary characteristic of group insurance is that it extends coverage to a group of people who are generally not related, under a single policy, often with a cost advantage because the risk is spread across many individuals.
Participants in a group insurance plan usually receive insurance at a reduced cost because the insurer’s risk is spread across a pool of policyholders. Moreover, group insurance plans often require no medical examination for individuals, which can be a significant benefit for those with pre-existing health conditions that might make it difficult or more expensive to obtain individual insurance coverage.
Group insurance can provide various types of coverage, including health insurance, life insurance, disability insurance, and dental insurance, among others. The terms of the coverage, including the cost to participants and the benefits provided, are determined by the agreement between the insurer and the organization purchasing the policy. Group insurance policies are beneficial to both the policyholders, who receive insurance at a potentially lower rate and with less hassle than individual policies, and to the insurer, which gains a large group of insured individuals without the need to assess each person individually.