Group Insurance plans provide health and life insurance coverage to a group of members, usually comprised of company employees or members of an organization. Members usually receive insurance at a reduced cost because the insurer's risk is spread across a group of policyholders.
Group health insurance plans are designed to be more cost-effective for businesses. Employee premiums are typically less expensive than those for an individual health plan. Premiums are paid with pretax dollars, which help employees pay less in annual taxes. Employers pay lower payroll taxes and can deduct their annual contributions when calculating income taxes.
Health insurance helps businesses pay for health care expenses for their employees. When you pay a premium, insurance companies pay a portion of your medical costs, including for regular doctor checkups or injuries and treatments for accidents and long-term illnesses. The amount and services that are covered vary by plan.
For example, an employee may have a $20 copay for each doctor visit. Or their plan may not cover any expenses until they have paid their deductible. Generally, the higher an employee's monthly premium, the lower their deductible will be.
Group life insurance is one type of life insurance where a single agreement, or contract, covers an entire group of people, like the employees of a company. Typically, with an employee life insurance policy, the owner of the life insurance policy is the employer, and the life insurance policy covers the employee. In many cases, the cost of group life insurance coverage can be less than what the employee would pay for the same amount of individual life insurance.
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