How does Group Life Insurance typically compare to individual life insurance policies in terms of cost?

Group Life Insurance is typically less expensive than individual life insurance policies for several reasons. One primary factor is that group policies cover a larger number of people, which allows for risk to be spread across a broader pool. Insurers can therefore offer lower premiums since they have a more significant overall perspective on risk. Additionally, since group life insurance is usually provided through an employer or organization, administrative costs are often lower than those associated with individual policies. Employers often subsidize part of the premium, further reducing costs for participants.

Furthermore, the underwriting process for group life insurance is generally more lenient compared to individual coverage, where more detailed assessments of individual health risk are required. This streamlined process allows for wider access and keeps costs down, making group plans advantageous for both employers and employees.

In contrast, individual life insurance policies may require extensive health evaluations, and costs are based on individual health risk profiles, making them generally more expensive on a per-person basis. This variation in risk assessment and administrative efficiency is what fundamentally distinguishes the cost structure between group life and individual life insurance policies.