What is the key difference between individual and group health insurance?

The key difference highlighted in the correct answer is that individual insurance is specifically purchased by a single person, as opposed to group insurance, which is typically offered through an employer or an organization to a group of individuals. This distinction is crucial because it reflects the foundational structure of these types of insurance. Individual policies are tailored to the specific needs of one person, allowing for personal customization, while group policies provide coverage based on the collective needs of a group, which often leads to different pricing structures and benefits.

Understanding this distinction is essential because it impacts how each type of insurance is managed, priced, and accessed. For example, group health insurance often comes with a lower premium than individual insurance due to shared risk among the group members, and it may include additional benefits that are not available in individual plans. Furthermore, eligibility for group insurance is contingent upon one's employment or membership in an organization, which differs from the individual's ability to procure a personal policy directly.