Which principle is crucial in the underwriting process for group life insurance?

In the underwriting process for group life insurance, the principle that everyone must be covered in the group is crucial. This principle reflects the fundamental nature of how group insurance operates — it is designed to provide coverage to a defined group of individuals, typically under a single contract.

By ensuring that all members of the group are covered, group life insurance mitigates risks associated with adverse selection, where only those who expect to use the insurance are likely to enroll. When everyone is covered, it spreads the risk across a larger pool of participants, which helps to stabilize premiums and ensure that the insurance fund can meet its obligations when claims arise.

Group life insurance is structured to provide affordable coverage while simplifying the underwriting process, which is often less stringent than that for individual policies. As a result, the focus is on the group as a whole, rather than on individual health assessments or applications, which aligns with the principle of universality within the group.