California Life and Health Insurance Practice Exam

Which of the following statements is true regarding group health insurance?

1. It is typically more expensive than individual plans

2. Coverage usually begins immediately upon enrollment

3. Employers often pay the full premium

4. It is issued to the individual insured

The correct answer is: Coverage usually begins immediately upon enrollment

Group health insurance typically provides coverage that begins immediately upon enrollment, which is a significant benefit for those joining a group plan, often through their employer. This immediate coverage contrast with some individual plans that may require waiting periods before benefits kick in. Immediate coverage helps ensure that members have access to necessary medical services without delay, particularly important in the event of unforeseen health issues. The other statements do not accurately represent group health insurance. For instance, group health insurance is generally more cost-effective than individual plans because it spreads risk across a larger pool of individuals, leading to lower premiums on average. While it's common for employers to contribute significantly to the premiums, they may not always pay the full amount, leaving employees with some responsibility for costs. Lastly, group health insurance is issued to a group rather than to individuals; the coverage is designed for a collective group, meaning that individual underwriting is not typically practiced in the same way as it is with individual plans.