SECTION IX - Group Life Insurance
In addition to individual life insurance, group life insurance is also important in providing financial security to families. Today group life insurance accounts for almost half of the total amount of life insurance in force in the United States.

Group life insurance differs from individual life insurance in several respects. Many individuals can be insured under a master contract between the insurer and policyowner; experience rating is used in larger groups to determine the premiums charged; individual evidence of insurability is usually not required because group underwriters evaluate the overall characteristics of the group; and the coverage usually provides low-cost protection to the employee.

Most states have enacted standard provisions for group policies, including:

Grace period (usually 31 days).
Incontestability (usually one or two years after the policy becomes effective; usually two years from the insured's effective date of coverage).
Entire contract (the application must be attached to and made part of the contract)
Evidence of insurability (individual insurability must be proven if the employee or member joins the plan after the enrollment period).
Misstatement of age (premium is adjusted to the correct age; under individual insurance benefits are adjusted).
Facility of payment (allows payment of policy proceeds to a close relative or friend if no beneficiary is named or living).
Conversion (the right to convert to an individual policy when the insured's coverage is terminated or the master policy is terminated).
Individual certificates (issued as evidence of coverage).
A group master policy is issued to the policyholder, and individual certificates (evidences of coverage under the group master policy) are issued to all enrolled employees or members.

Basic Characteristics
Group life insurance is frequently issued to employers, labor unions, trusts or associations to cover employees or members. The plan sponsor (the employer, union, association, etc.) is the policyholder responsible for administering the plan and making premium payments to the insurance company. Coverage is generally available without individual medical examinations. Premiums are based on the experience of the group as a whole. 49 Group life insurance has certain basic characteristics:

Numerous individuals are insured under a master contract, which contains all of the provisions concerning the coverage provided. There are only two parties to the master contract: the insurer and policyowner. In most cases, the group policyowner is the employer. Each individual insured receives a certificate of insurance, which provides evidence of coverage.
Individual members are not normally required to provide evidence of insurability. Group insurance underwriters evaluate the overall characteristics of the group of persons to be insured rather than the individual characteristics of each person in the group.
If the group is sufficiently large, experience rating is used to determine premiums. Under experience rating, past losses sustained by the group are considered in determining the policy premium.
For covered employees the cost of group life insurance is generally lower than individual coverage because the employer may pay part or all of the cost, which reduces the cost to the employees.