Your iPhone has to run iOS 10 for the feature to work, though.
Calls you receive on Hangouts will appear as regular voice calls on your iPhones’ lock screen. Callkit gives VoIP services the ability to use Apple’s stock Phone app. So you can ring people through Hangouts from within the stock app itself.
The only indication that it’s a VoIP call is a small mark underneath the contact’s name telling you that it’s using Hangouts audio. You won’t wander to an area without coverage by mistake while talking on the phone.
You have to manually activate it by going into Settings inside the Hangouts app. Just toggle “Answer on lock screen” to activate it… or to switch it off if you change your mind.