Social insurance is any government-sponsored program with the following four characteristics:
- the benefits, eligibility requirements and other aspects of the program are defined by statute;
- explicit provision is made to account for the income and expenses (often through a trust fund);
- it is funded by taxes or premiums paid by (or on behalf of) participants (although additional sources of funding may be provided as well); and
- the program serves a defined population, and participation is either compulsory or the program is heavily enough subsidized that most eligible individuals choose to participate.
Social insurance has also been defined as a program where risks are transferred to and pooled by an organization, often governmental, that is legally required to provide certain benefits.
In the U.S., programs that meet these definitions include Social Security, Medicare, the PBGC program, the railroad retirement program and state-sponsored unemployment insurance programs. The Canada Pension Plan (CPP) is also a social insurance program.
Read more about Social Insurance: Similarities To Private Insurance, Differences From Private Insurance
Famous quotes containing the words social and/or insurance:
“A man’s social and spiritual discipline must answer to his corporeal. He must lean on a friend who has a hard breast, as he would lie on a hard bed. He must drink cold water for his only beverage. So he must not hear sweetened and colored words, but pure and refreshing truths. He must daily bathe in truth cold as spring water, not warmed by the sympathy of friends.”
—Henry David Thoreau (1817–1862)
“For there can be no whiter whiteness than this one:
An insurance man’s shirt on its morning run.”
—Gwendolyn Brooks (b. 1917)