What is an advantage of group insurance?

An advantage of group insurance is indeed the lower premiums due to shared risk. In a group insurance plan, the risk is distributed across multiple members of the group, which means that the insurer can offer lower premiums compared to individual insurance policies. This occurs because the overall risk to the insurer is reduced when many individuals are covered under a single policy. Since the likelihood of all insured individuals requiring significant claims at the same time is low, insurers can afford to charge lower rates.

Additionally, the administrative costs associated with managing group insurance policies are typically lower on a per-member basis than individual policies, contributing further to the cost-effectiveness of group insurance. This makes it an attractive option for employers who want to provide health benefits to their employees and for individuals who might not be able to secure affordable coverage on their own.