The reason that non-elective group insurance is cheaper

At most of the companies that I've worked for, they have a deal on life insurance that is very inexpensive, but with one catch — you have to sign-up for the life insurance before your first day of work (more or less), or else you have to jump through some hoops if you later want to get the insurance. It turns out there's a reason why, as described by Daniel A. Graifer ( in the 15 Apr 2001 Crypto-Gram newsletter:

… the other big bugaboo of insurance: "adverse selection": Insurance buyers have better knowledge of their risk characteristics than the insurers, leading higher risk clients to over-insure (because it's cheap relative to the risks) and low risk clients to under-insure. That's why non-elective group insurance is cheaper than individual policies in any risk category.