Tennessee Insurance Practice Exam

What is the primary difference between group insurance and blanket health policies?

1. Group insurance is more expensive

2. Blanket health policies do not issue certificates

3. Group insurance covers only employed individuals

4. Blanket health policies cover only travelers

The correct answer is: Blanket health policies do not issue certificates

The primary difference between group insurance and blanket health policies lies in the nature of coverage and the way policies are structured. In group insurance, coverage is typically provided to a defined group of individuals, such as employees of a company or members of an organization. Each eligible member is issued a certificate of coverage, which details their benefits and coverage specifics. On the other hand, blanket health policies are designed to provide coverage to a group of individuals whose membership can vary, often under circumstances like travel or participation in a specific event. These policies do not issue individual certificates to each member; instead, they provide a single policy that covers the entire group, simplifying administrative processes but potentially complicating individual claims. The absence of certificates in blanket health policies highlights this fundamental difference and contributes to their distinct use cases compared to group insurance. Blanket policies are often utilized in situations where the group dynamic is fluid, such as sports teams or traveling groups, rather than a stable, defined workforce.