What is a primary characteristic of group life insurance?

Group life insurance is characterized by premiums that are based on the collective risk of the entire group rather than on individual health assessments. This means that the cost of coverage is determined by factors such as the group's overall demographics and health status, spreading the risk across all members. This approach allows for potentially lower premiums since the risk is diversified among a larger population, rather than assessing individual risks separately.

In contrast, individual life insurance policies typically require individual health scrutiny, which can lead to varied premium costs based on personal health conditions. Similarly, individual underwriting is a standard practice in individual policies, but in group plans, underwriting is minimal or may not be needed at all. Additionally, group life insurance can include contracts of varying lengths, not limited to long-term contracts alone, allowing for more flexibility based on the needs of the group.