Group Contract
What Does Group Contract Mean?
A group contract is a health or life insurance policy that provides coverage to a group of people, typically employees of the same company. These contracts are commonly included as part of an employment benefits package, offering insurance coverage to employees at discounted rates. By grouping employees, insurers are able to offer lower premiums and more affordable coverage compared to individual policies. This makes group contracts a cost-effective way for employers to provide insurance benefits to their staff.
Insuranceopedia Explains Group Contract
Unlike individual insurance contracts, the policyholder of a group insurance contract is typically not the insured. In most cases, the policyholder is an employer who has made arrangements with an insurance company to provide coverage for their employees.
Group insurance contracts can also be held by entities such as employer associations or employer trusts. In these cases, the coverage extends to individuals employed by the members of the association or trust, rather than being limited to employees of a single company. This structure allows broader access to insurance benefits for individuals working under various employers within the group.
