What is the primary purpose of a group health insurance policy?

The primary purpose of a group health insurance policy is to cover a specific group of people under one policy. This type of insurance is designed to provide healthcare coverage to a defined group, often consisting of employees of a company, members of an association, or individuals who share a common interest. By insuring a group rather than individuals, premiums can be lower, and the administrative burden of managing multiple individual policies is significantly reduced.

Group health insurance typically encompasses a variety of medical services, thereby promoting overall health and well-being within the group. This structure also tends to make it easier for members to enroll and maintain coverage, as it is often part of an employee benefits package or organizational support.

In contrast, other options do not accurately capture the essence of group health insurance. Offering individual coverage at lower costs would be more associated with individual health insurance policies, while covering a single life pertains to individual life insurance. Lastly, ensuring retirement income pertains to pension plans or retirement accounts, not to health insurance policies. Thus, the defining characteristic of group health insurance is its collective approach to covering a designated group under one shared policy.