In group medical expense insurance, the master policy is issued to the policyholder, and each covered employee receives:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
In group insurance, the insurer issues a single master policy to the group policyholder, typically the employer, union, or association. Individual employees are not issued their own insurance policies and are not individually underwritten. Instead, each covered employee receives a certificate of coverage that summarizes the benefits, exclusions, and conditions of the master policy. The certificate is evidence of coverage but is not itself the insurance contract; the master policy controls the actual terms. This structure distinguishes group coverage from individual policies.
Why the other options are wrong
- B) Employees do not receive separate individually underwritten policies; group members are covered under the single master policy by certificate.
- C) The insurer's annual report is a corporate disclosure document and is not given to each employee as evidence of coverage.
- D) Dividend statements relate to participating policies and are not issued quarterly to every covered employee as proof of coverage.
Memory hook
One master policy for the group, certificates for the people. The certificate summarizes, the master governs.