What is the main benefit of group life insurance?

The primary advantage of group life insurance is that it typically offers lower premiums due to the collective bargaining power of the group. When insurance is purchased as a group, the risk is spread out over a larger number of individuals, which can lead to economies of scale. This means that each individual in the group pays a smaller amount than they would for an individual policy, making it a more affordable option for members of the group. Many employers utilize group life insurance as an employee benefit because it helps to keep costs down while providing essential coverage.

Other options may present benefits that might appeal to individuals, such as guaranteed acceptance or higher coverage amounts, but the distinct advantage of reduced costs due to collective bargaining stands out as the most significant and widely recognized benefit of group life insurance. Additionally, unlimited coverage amounts are generally not a standard feature in group life policies, which often impose limits on coverage.