In the context of group insurance, what does 'master policy' refer to?

In the context of group insurance, the term 'master policy' refers to an overall group insurance contract. This document is issued to the employer or sponsor of a group plan and outlines the terms and conditions of the insurance coverage provided to all members of the group.

The master policy is distinct from individual policies since it typically covers a group of people under a single contract, often leading to lower premiums and broader coverage options compared to individual policies. The master policy includes details on premium payments, benefits, coverage limits, and responsibilities of the insurer and the group administrator. It serves as the foundational agreement for the insurance coverage that will be extended to individual members of the group, making it a crucial element in the administration of group benefits.