Question

9 which of the following statements is true about group insurance policies?
they insure all individuals in the selected group
the insurance is free to all members of the group
all members of the group are required to buy the insurance
they are usually less expensive than individual insurance policies

Explanation:

Define group insurance characteristics

Using the Group Health Insurance knowledge point
Group insurance plans are purchased by an entity (like an employer or association) for its members. Because risk is spread across a large pool of people and administrative costs are lower per person, these policies are typically much more cost-effective than individual plans.

Evaluate the given options

• They insure all individuals in the selected group: Incorrect. Participation is often voluntary, and individuals must choose to enroll or meet eligibility requirements.
• The insurance is free to all members of the group: Incorrect. Members usually pay a portion of the premium through payroll deductions or membership dues.
• All members of the group are required to buy the insurance: Incorrect. Except in rare mandatory non-contributory plans, members can generally opt out.
• They are usually less expensive than individual insurance policies: Correct. Group rates benefit from economies of scale and shared risk pools.

Answer:

• (A) They insure all individuals in the selected group
• (B) The insurance is free to all members of the group
• (C) All members of the group are required to buy the insurance
• (D) They are usually less expensive than individual insurance policies (Correct answer)