Overview: Group life insurance is structured entirely differently from individual life — different parties, different contracts, different underwriting, and different rights.

Structure and Contracting

In an individual life insurance contract, the insurer issues one policy to one policyowner (often the insured). The policyowner holds all rights: to change beneficiaries, assign the policy, borrow against cash value, or surrender the policy.

In a group life arrangement, the insurer issues a single master policy to the group sponsor — typically an employer, labor union, or professional association. Individual employees are not parties to the master policy. They are third-party beneficiaries who receive a certificate of insurance (certificate of coverage) summarizing their benefits. The certificate is not the contract itself; the master policy is. If there is a conflict between what the certificate says and what the master policy says, the master policy ordinarily controls — though courts have increasingly recognized employees' rights when they were misled by certificate language.

Underwriting

Individual life insurance involves detailed underwriting of each applicant's personal health, finances, and lifestyle. Group life insurance uses group underwriting, evaluating the collective risk of the workforce as a whole. For most coverage amounts, individual members receive guaranteed issue — they are automatically enrolled without medical exams or health questionnaires. This is possible because the insurer is assessing group demographics (average age, industry, claims history) rather than individual health.

Portability and Permanence

An individual policy is portable — it remains in force as long as premiums are paid, regardless of employment status, geography, or anything else. A group policy terminates when the individual leaves the group. The law provides a safety net through the conversion privilege.