Which statement best differentiates between individual and group life insurance?

Individual life insurance is typically characterized by its purchase by a single person rather than by a group, which is the basis for group life insurance policies. Individual life insurance is designed to meet the specific needs of an individual, taking into consideration personal circumstances such as health, age, and desired coverage amounts. This type of insurance involves a contract between the policyholder and the insurer, where the individual provides information for underwriting purposes and selects their coverage.

On the other hand, group life insurance is issued to a group, often an employer or association, and provides coverage to all eligible members of that group, usually without the need for individual medical underwriting. This group dynamic allows for benefits such as lower premiums per individual due to the collective nature of the risk pool.

This distinction is crucial as it highlights not only the nature of the insured parties (individuals vs. groups) but also the different operational and pricing structures involved in these two types of policies. The other options do not accurately capture this fundamental difference, such as mistakenly suggesting cost comparisons or underwriting requirements that do not universally apply.