Group life insurance, also recognized as wholesale or institutional life insurance, provides term coverage for a collective of individuals, commonly employees within a company, members of a union or association, or participants in a pension or superannuation fund. Unlike individual policies, it typically doesn’t necessitate individual proof of insurability during underwriting.
The underwriter evaluates factors such as the group's size, turnover, and financial stability rather than assessing each person individually. Contract terms aim to prevent adverse selection, ensuring fair coverage for all members. In some cases, exiting members can maintain their insurance by purchasing individual coverage.
Unlike traditional policies, where underwriting occurs on an individual basis, group life insurance's underwriting focuses on the collective risk of the entire group.
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