Group Insurance
Insurance coverage provided to a group of people under a single master policy, typically through an employer, union, or professional association. All group members receive the same basic coverage terms, often at lower cost than individual policies.
Example
“The teachers' union negotiated group insurance that includes health, dental, and life coverage for all members at significantly reduced rates.”
Memory Tip
Think 'Strength in Numbers' - groups get better insurance deals because there are more people sharing the risk.
Why It Matters
Group insurance provides access to coverage that might otherwise be unaffordable or unavailable, especially for people with pre-existing conditions. It's often a key factor in job decisions and provides financial security that individuals might not be able to obtain on their own.
Common Misconception
People often assume group insurance automatically means lower costs for everyone, but individual circumstances vary, and some healthy individuals might find cheaper coverage elsewhere. Also, group insurance typically offers limited customization options compared to individual policies.
In Practice
Tech startup XYZ offers group insurance to its 25 employees, including health insurance (company pays 75% of $600 monthly premium), $25,000 life insurance (fully company-paid), and optional dental coverage (employee pays full $40 monthly premium). Employee Janet pays $150 monthly for health insurance, $0 for life insurance, and $40 for dental, totaling $190 monthly for coverage that would cost her approximately $450 monthly if purchased individually.
Etymology
The term emerged in the early 1900s when organizations began purchasing insurance collectively, combining 'group' from Old French 'groupe' meaning cluster, with 'insurance' from Latin 'securus' meaning secure.
Common Misspellings
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Related Terms
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See Also
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