What is generally a characteristic of group insurance?

Group insurance is typically characterized by its cost-effectiveness compared to individual insurance policies. This lower cost arises primarily from the risk pooling inherent in group plans. When a larger group of individuals is covered under a single insurance policy, the insurer can spread the risk across many participants. As a result, the administrative costs are reduced, and the risk of loss from claims is shared, which often leads to lower premiums for each member of the group.

This economy of scale is beneficial for both the insurer and the insured, making group insurance an attractive option for organizations such as employers who provide coverage to their employees or associations that offer plans to their members.

In contrast, individual insurance plans typically involve higher premiums since they do not benefit from this pooling effect and are priced based on the risk profile of each individual.