Group Insurance is insurance designed with businesses in mind. While individual insurance plans can deny coverage or increase rates to a specific individual due to poor medical conditions or high-risk situations, a group insurance plan cannot. Insurance companies must accept the entire group or none at all, nor can they increase rates to one individual. With group insurance plans, there is strength in numbers.
Group insurance operates under entirely different concepts and principles than does individual insurance. Many mistakenly assume that group insurance is a large scale wholesaling of individual term policies under a common administration. This is not the case. Group coverage insures “classes of persons”, not individuals. The contract of group insurance is between the insurer and the organization purchasing the group contract (most often an employer). Different employees may enter or leave the group, but the names of individual employees never appear in the contract.
Employee benefits programs should be designed and managed to enhance your compensation strategy and corporate objectives. Grouping individuals together under a policy translates into savings for everyone when compared to individual coverage.