Page 15 - Life Assurance
P. 15
/4 Differences between private insurance
and social insurance:
Social Insurance: Public insurance program
providing protection against various economic
risks( for example: loss of income due to sickness,
old age or unemployment) in which benefits are
not strictly related to contributions.
Private insurance programs differ from
social insurance in several ways:
1- Social insurance contributions are
normally compulsory and may be paid by the
insured employers and the state as well as by
the insured himself also.
2- Social insurance benefits are not strictly
tied to contributions as in private insurance. For
example to make the insurance program serve
certain social purpose, some groups are
included among beneficiaries even though they
haven't contributed for the required periods of
time (the qualification period).
3- Benefits are also increased in response to
increases in the cost of living, again weakening
the link between contribution and benefits.
15 Lif11/life/life08
and social insurance:
Social Insurance: Public insurance program
providing protection against various economic
risks( for example: loss of income due to sickness,
old age or unemployment) in which benefits are
not strictly related to contributions.
Private insurance programs differ from
social insurance in several ways:
1- Social insurance contributions are
normally compulsory and may be paid by the
insured employers and the state as well as by
the insured himself also.
2- Social insurance benefits are not strictly
tied to contributions as in private insurance. For
example to make the insurance program serve
certain social purpose, some groups are
included among beneficiaries even though they
haven't contributed for the required periods of
time (the qualification period).
3- Benefits are also increased in response to
increases in the cost of living, again weakening
the link between contribution and benefits.
15 Lif11/life/life08
