Group Insurance Contract (Kollektivversicherung)
In a group insurance contract, a policy is concluded between an insurer and a policyholder (e.g. an employer or association) that insures a group of persons under uniform conditions.
Concept
In a group insurance contract, it is not the individual insured person but a third party (typically an employer, but also possibly an association or other organisation) that concludes a contract with the insurer as policyholder, insuring the members of a defined group (e.g. all employees of a company) under uniform conditions. The insured persons themselves are not party to the contract, but merely beneficiaries.
Distinction from Individual Insurance
Unlike individual insurance, where the policyholder and the insured person are one and the same and individual contract terms (including individual health screening and premium) are agreed, members of a group insurance scheme typically benefit from standardised, often more favourable conditions and a simplified or entirely absent underwriting process.
Relevance for Insurance Practice
Group insurance contracts are particularly widespread in sick pay insurance and supplementary occupational pension provision; for advisory purposes, clearly distinguishing between the policyholder (generally the employer) and the insured persons (the employees), and their respective rights, is of central importance.