First introduced in 1911, group life insurance has grown since World War II chiefly because it has been included as a fringe benefit in collective-bargaining agreements. It provides a means of insuring a number of people in a business establishment, society, or other organization. A master contract is issued, and each insured person receives a certificate specifying the amount of the insurance and his or her beneficiary. Group policies contain a conversion clause that permits an insured, on separation from the group, to convert to an individual type of nonterm life insurance policy without evidence of insurability. The new policy, however, is issued at the premium rate applicable at the attained age of the policyholder. Because group insurance is a form of wholesale buying, its economies are passed on to policyholders in the form of lower premiums per dollar of coverage. Group life insurance usually is issued on a 1-year renewable term basis.
