A group insurance policy is one that covers a group of people instead of just an individual. Generally the group is made up of members who share either an employer or some other type of common faction or society, such as a labor union or church service. A group health insurance plan is often more cost effective than that available to an individual. With a group insurance plan, many participants contribute which allows the insurance company to offer lower premiums, which makes it much more affordable to the individual members.

A common benefit of a group insurance policy is the fact that premiums quoted may not be calculated based on risks. For example, in an employment group health insurance plan all of the members would pay the same price for coverage, their age or pre-existing medical conditions would not be relevant factors, whereas the costs would vary for an individual purchasing private health insurance depending on their habits, age and location.

An added advantage of a group insurance policy is the eligibility to renew coverage as long as the person remains a member of the associated group. A person who has secured health insurance from their employer will usually remain covered as long as their premiums are paid and they remain employed. With individual coverage, the insurance company often has the opportunity to deny renewal to a policyholder based on whether or not their risk factors have changed.

A group insurance policy can usually be financed and the premiums automatically deducted through payroll. Occasionally companies will pay the entire policy cost as an employee benefit, however this is not always the case. Premium prices can also rise depending on different factors. Participants who receive costly medical care can drive the price tag of premiums up over time, which causes the entire group to shoulder the bulk of the increase.

Benefits for group health insurance can vary but generally consist of the same basic features.  Most policies cover routine doctor visits and preventative care, along with emergency procedures and treatment provided by hospitals, including extended care and rehabilitative therapy. Often additional coverage of a spouse or dependent children can also be purchased for a higher premium. Coverage of vision care, dental care, or mental health vary from employer to employer and policy to policy. Some prescription medication is also covered but usually with an out of pocket expense for the policyholder, such as a co-payment of some kind. Also generally the cost is higher for name brand drugs as opposed to their generic counterparts. Despite the stipulations, group health insurance is often the only opportunity for many to obtain affordable coverage for medical expenses.