South Carolina Life Insurance Practice Exam

If an employee wants to join group insurance coverage outside of the open enrollment period, what must the employee provide?

1. Proof of previous insurance

2. Evidence of insurability

3. Approval from an employer

4. Application fee

The correct answer is: Evidence of insurability

When an employee wishes to join group insurance coverage outside of the open enrollment period, the requirement to provide evidence of insurability is fundamental. This evidence typically involves documentation or information that verifies the health status of the employee. Insurance companies use this information to assess the risk of covering the individual based on their current health conditions and medical history. The evidence of insurability may entail completing a health questionnaire or providing medical records that show the individual's health risks. Since open enrollment allows individuals to enroll without any underwriting, joining outside of this period typically imposes the necessity for additional scrutiny to ensure that the insurance provider is making sound underwriting decisions. This process helps to mitigate the risk of adverse selection, where only those who expect to need insurance most likely to enroll. In contrast, other options such as proof of previous insurance, approval from an employer, or an application fee do not fulfill the specific requirement set by insurers during this unique enrollment circumstance. Therefore, providing evidence of insurability is the correct action for an employee attempting to enroll in group insurance at a time outside of the standard enrollment period.