Which of the following is considered a disadvantage of conventional group insurance?

The choice of high administrative costs as a disadvantage of conventional group insurance is significant and highlights a critical area of concern for employers and organizations offering these plans. Conventional group insurance typically involves various fixed costs associated with administration, such as enrollment, claims processing, compliance with regulations, and ongoing customer service needs. These administrative expenses can accumulate to represent a substantial portion of the overall costs of providing insurance benefits.

On the other hand, flexible plan options can be viewed as an advantage rather than a disadvantage, as they offer tailored benefits that meet the diverse needs of employees. Transferability of policies also tends to be a benefit; in many group insurance scenarios, policyholders may be able to transfer coverage when they leave the group, which adds convenience and security. The lack of guaranteed benefits typically relates to certain variable factors such as claims experience and market conditions but is not the most pressing disadvantage in the context of conventional group insurance, especially when weighed against the burden of high administrative costs that can affect the sustainability and the viability of the insurance program.