Group life insurance is more expensive than individual life insurance.

Group life insurance is more expensive than individual life insurance.

• A. True
• B. False
• C. Not Sure
• D. It Depends

Answer: (B)

Group life insurance is typically cheaper than individual life insurance because it pools risk across many people under a single master policy, which reduces underwriting and administrative costs. With a group plan, the insurer can spread expenses over a large number of lives and apply selective, more favorable pricing rather than assessing each person individually. Coverage is often offered to all employees, sometimes with employer contributions, and underwriting is simplified or limited, reducing the per-person premium. In contrast, individual life insurance requires underwriting for each applicant, factoring in age, health, and personal risk, which generally leads to higher premiums to reflect that individual risk. While there can be edge cases where a group plan ends up more expensive (for example, with unusually high coverage or older participants), the common outcome is that group life insurance is less expensive.

Group life insurance is typically cheaper than individual life insurance because it pools risk across many people under a single master policy, which reduces underwriting and administrative costs. With a group plan, the insurer can spread expenses over a large number of lives and apply selective, more favorable pricing rather than assessing each person individually. Coverage is often offered to all employees, sometimes with employer contributions, and underwriting is simplified or limited, reducing the per-person premium. In contrast, individual life insurance requires underwriting for each applicant, factoring in age, health, and personal risk, which generally leads to higher premiums to reflect that individual risk. While there can be edge cases where a group plan ends up more expensive (for example, with unusually high coverage or older participants), the common outcome is that group life insurance is less expensive.