What is group life insurance?

Group life insurance is defined as a policy that provides coverage for a group of individuals, typically offered by employers as part of an employee benefits package. This type of insurance is designed to offer life insurance protection to a large number of employees under a single master policy, which can make it more affordable than individual policies. The employer often pays for some or all of the premiums, and coverage may be extended to employees as well as their dependents, contributing to employee welfare and satisfaction.

This collective approach simplifies the insurance process, as the underwriting is usually less stringent compared to individual policies. Premiums are generally lower because the risk is spread across a large group of people, resulting in economies of scale. Additionally, employees can often convert group life insurance to an individual policy if they leave the company, securing their coverage in the process.

The other options describe variations of life insurance that focus on individual or family coverage rather than a collective group approach, which is why they do not accurately represent the definition of group life insurance.