Arizona Life and Health Practice Exam

What is the type of health insurance where underwriting procedures are the most restrictive?

1. Group insurance

2. Medicare

3. Individual insurance

4. Supplemental insurance

The correct answer is: Individual insurance

The type of health insurance where underwriting procedures are the most restrictive is individual insurance. This is because, in individual insurance, the applicant's health history and specific health conditions are closely evaluated during the underwriting process. Insurers conduct detailed assessments of the individual's medical records, lifestyle, and overall health to determine eligibility and set premiums. Unlike group insurance, where coverage is provided to groups without extensive underwriting, individual insurance requires a personalized assessment. This allows insurers to identify risk factors associated with each individual applicant, resulting in stricter guidelines compared to more flexible options like group or supplemental insurance. Additionally, Medicare generally has more standardized eligibility requirements due to it being a federally administered program, thus simplifying the underwriting process. In summary, individual insurance involves rigorous underwriting procedures, making it the most restrictive type of health insurance in terms of assessing risk before granting coverage.