CII Certificate in Insurance IF7 Practice Test 2025 – Complete Guide

The distinction between individual health insurance and group health insurance primarily lies in who purchases the insurance and how it is structured. Individual health insurance is obtained by a single person who typically purchases their policy independently to cover their own healthcare needs. This means the individual is responsible for selecting the policy that best fits their personal situation and budget, making it a more tailored solution for the individual's healthcare requirements.

On the other hand, group health insurance is usually provided by employers or organizations to a group of individuals—often employees and their dependents. This approach allows for shared risk and often leads to lower premiums, as the insurer spreads the risk among a larger pool of insured individuals. Employers typically negotiate these plans at a group rate, and the coverage may be more limited compared to individual plans in terms of customization.

The other options present inaccuracies regarding the characteristics of individual versus group health insurance. Individual health insurance can often be quite comprehensive, and while group insurance may sometimes offer a wider range of benefits, that is not a definitive characteristic that distinguishes it from individual insurance. Additionally, the characterization of group health insurance as being purchased by an individual is incorrect, as group insurance is typically procured by an employer or organization rather than the individuals who will use the coverage.