What typically determines premiums for group life insurance?

Premiums for group life insurance are primarily determined by the overall health and demographics of the group. When assessing group life insurance, insurers consider factors such as the average age, gender distribution, health status, and lifestyle choices of the members as a collective entity. This approach allows the insurer to evaluate risks at a group level rather than at an individual level.

By using collective data, insurers can create more accurate risk assessments and set premiums that reflect the characteristics of the entire group rather than focusing solely on individual members. This method often results in more favorable premiums for group insurance, as risks are pooled among many policyholders, which can mitigate the effect of an individual’s poor health or age on the overall premium amount.

For example, if a group has a younger demographic with healthier lifestyles, premiums may be lower compared to a group that is older or has a high proportion of members with health issues. Each member's specific age and health status, as in the first option, do not weigh as heavily because the group’s average characteristics are used for premium calculations. Other factors, such as occupation and claims experience, can influence premiums but are not the primary determinants in the same way that the group's overall health and demographics are.