Group
insurance is
an insurance that covers a group of people, for example the members of a
society or professional association, or the employees of a particular employer
for the purpose of taking insurance. Group coverage can help reduce the problem
of adverse selection by creating a pool of people eligible to purchase
insurance who belong to the group for reasons other than the wish to buy
insurance. Grouping individuals together allows insurance companies to give
lower rates to companies, "Providing large volume of business to insurance
companies gives us greater bargaining power for clients, resulting in cheaper
group rates."
