Group insurance differs from individual insurance in several respects. A distinctive attribute is the coverage of many persons under sensation contact. A master contract is formed between the insurance underwriter and the group policy owner for the benefit of the individual members. In most plans, the group policy owner is the employer. Employees receive a certificate of insurance that shows they are insured. A second characteristic is that group insurance usu completelyy costs less that comparable insurance purchased individually. Employers unremarkably pay part or all of the cost, which reduces or eliminates premium payments by the employees. In addition, administrative and selling expenses are reduced as a result of aggregate distribution methods. Another characteristic is that individual evidence of insurability is usually not required. Group selection of risks is utilize, not individual selection.
The insurance agent is concerned with the insurability of the group as a whole or else with the insurability of the single member within the group. Finally, experience rating is used in group insurance plans. If the group is sufficiently large, the tangible loss experience of the group is a major agentive role in determining the premiums charged.
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