Which statement best describes the difference between a group medical expense policy and an individual medical expense policy?

• A. Group policies cover a defined group such as an employer, while individual policies are purchased by a person independently, with underwriting and eligibility differences.
• B. Group policies typically have higher premiums but the same underwriting as individual policies.
• C. Individual policies require underwriting but not eligibility considerations.
• D. Group policies never require health underwriting or eligibility checks.

Answer: (A)

The main idea is that coverage is organized around who is insured. A group medical expense policy is issued to a defined group, such as employees of an employer, so eligibility is based on being part of that group rather than on an individual’s health status. The insurer often uses group-level underwriting and may not require individual health questions for each member, which helps keep premiums lower and simplifies enrollment for the group. In contrast, an individual medical expense policy is purchased by a person on their own, and the insurer assesses the individual’s insurability through underwriting; eligibility and premium are based on that person’s health and risk, not on a group membership. This is why the statement that best describes the difference is that group policies cover a defined group with group-level underwriting and eligibility, while individual policies are purchased independently with individual underwriting and eligibility considerations. It wouldn’t be accurate to claim group plans always have higher premiums or that group plans never require any underwriting, and individual policies do involve eligibility considerations in addition to underwriting.