Can life insurers issue group life insurance at lower premium rates?

Group life insurance is typically issued at lower premium rates compared to individual policies due to several factors. These include the pooling of risk among a larger group and reduced administrative costs associated with underwriting and issuing multiple policies simultaneously.

When insurers issue group life insurance, they assess the collective risk of the group rather than evaluating each individual separately, which allows for economies of scale and frequently leads to lower premiums. The structure of group insurance also tends to enable certain underwriting efficiencies, making it feasible to offer more competitive pricing.

Moreover, group policies often include simplified underwriting requirements, which may not be available in the individual market. This packaging of coverage leads to a more favorable pricing structure, benefitting both the insurer and the insured group.

In contrast, the other options suggest various restrictions or conditions for issuing group coverage at lower rates, which do not align with the standard practices observed in the life insurance industry regarding group policies. The essence of group insurance inherently supports the notion of collective risk sharing, which is why lower premiums are a common outcome in these arrangements.