What is "group life insurance"?

Group life insurance is a type of life insurance policy that provides coverage to a group of people, often employees of a company or members of an organization. This arrangement allows for the sharing of risk among a larger pool of individuals, typically resulting in lower premiums per person compared to individual life insurance policies. Because the coverage is usually obtained through an employer or an organization, underwriting processes may be simplified, often requiring minimal health information from participants.

In many cases, group life insurance can be provided as a benefit of employment, enabling employees to obtain life coverage at a lower cost and with ease of enrollment. This makes it an attractive option for employers looking to offer comprehensive benefits to attract and retain talent. The policy pays a death benefit to the beneficiaries of covered individuals in the event of their passing, thereby providing financial protection during a difficult time.

This approach contrasts with other types of policies that may focus on individual coverage or specific situations, such as accidental death only or targeting specific populations like freelancers. Therefore, understanding the collective nature of group life insurance is crucial in recognizing its benefits and applications in the field of life insurance.