What is the nature of Group Life Insurance?

Group Life Insurance is characterized by being issued under a master contract that covers a qualified group, rather than being provided on an individual basis. This means that a single policy is purchased by an organization, such as an employer or a professional association, which then extends coverage to multiple individuals, typically employees or members of that organization.

The advantage of this structure is that it allows for lower premiums on a per-person basis because the risk is spread among a larger group of individuals. This also simplifies the underwriting process, as individuals are often not required to undergo extensive medical examinations before being covered. Instead, group life insurance often has less stringent eligibility requirements compared to individual policies.

Additionally, while group policies can include term coverage, they are not limited to just term policies; some group life insurance offerings may also include permanent coverage options. Thus, the overarching concept of group life insurance focuses on the collective nature of the contract and coverage rather than the particulars of individual underwriting or policy type.