group insurance
Insurance Dictionary -> group insurance
As the name suggests, group insurance is a type of insurance policy that covers a large group of individuals; commonly workers under the same employer, or those who are part of a union, society or sporting organization. The same rules apply to group insurance as it does to other policies, where regular premiums are paid and payouts are made when a pre-agreed event occurs, such as injury or property damage. Group insurance offers a lot of benefits to the insurance company and also to the individuals that make up the group being insured.
For the insurance company itself, because the policy is usually managed by only one person (the head of the organization, or the employer), then there are no costs associated with hundreds of different individual policies, or any admin associated with hundreds of different people. The policy is treated as its own entity or person.
For the individuals who are part of the group, because the policy is all under one umbrella, there are no bias selections or risk factors associated with any one individual. If one person in the group went private they may end up paying more in premiums because they will be individually assessed. This makes employers that offer group insurance a lot more attractive to potential employees, who may not be able to afford private insurance, or at least a deal as good as if they were part of the group.
Also, under private insurance the insurance company has the right to refuse to renew the contract, or they might increase premiums should the person become ill for example, and more likely to need a medical payout. Under group insurance the premium remains consistent between all parties, and the individual will remain covered as long as they are part of the group, no matter what circumstances may change.