What is the Difference Between Social Insurance and Social Security? is discussed in this article for your perusal.
Across the globe, many people seem not to be well acquainted with the term Social insurance whereas social security happens to be a well-known term.
This article will explain the difference between these two concepts and as well highlight their distinguishing examples.
Social insurance is a unique program. The management of the operation concerning this program is done or carried out by a private individual (elite) and the State (government).
Social insurance aims to execute programs that can assist society during periods of financial uncertainties or instabilities. These precarious cases can be caused by adversity, asperity, hardness, difficulty, rigor, disability, or age.
Examples of social insurance programs organized basically by Private individuals or the government include:
1. Basic Income
The government or private individuals can offer a specific income to act as an aim which is officially referred to as Social Security to members of society, especially the aged or disabled for several years.
2. Unemployment insurance
When it is noticed that the majority of the people in the society are unemployed, the government can grant unemployment insurance to people who are not classified as voluntary unemployed youths to serve as a categories income substitute for a job especially if there were laid off from their previous job still they can get another suitable job.
3. Provision of health care services
The government can also partner with Medicare in the provision of health care services at a very minimal cost to the aged in society using the various forms of health insurance.
4. Workers’ compensation
To prevent further strikes, another example of social insurance is compensation to the workers. Government uses this medium to cover up any forgotten salary or unaccounted wages in cases where a worker sustains an injury in or during the case duty job in addition to other funds like vocational rehabilitation.
On the other hand, Social security is otherwise known as protection. It is simply an insurance program that is more legalized and formal.
It can be described as a group of programs and policies formulated to eradicate poverty and low standard of living.
The aim of Social security is also to influence the market structure specifically the labor markets and improve society’s capacity against income discrimination.
The unique feature of Social security is that it is provided by society as a welfare package to individuals to guarantee income distribution and promote better healthcare services to members of society.
Example of Social Security
In other words, Social security is primarily set up to benefit individuals in society especially the less privileged to improve their means of livelihood.
1. Provision of Income can be offered to the less privileged to increase their means of livelihood or make them a better chance of living.
2. Less privilege package
This is when society pools together resources to offer services to specific people who are considered less privileged.
3. Offer of scholarships
If a child is exceptionally brilliant but cannot further his or her education probably due to the demise of the parent, society can find it worthy of offering assistance in form of Social security to sponsor the underprivileged child.
4. Health services
Another example is offering health services to the elderly who may be neglected in society or even offering assistance to a sick person.
The purpose of social security is basically to help members of the community survive certain health challenges such as the coronavirus pandemic or other 1vulnerable diseases capable of easily causing hurt or harm physically, mentally, or emotionally to the aged.
This is expected that when individual benefits from Social security, they should in turn contribute to the welfare of society in the long run, making it more or less an investment and one who benefits from this program can only be entitled to the income relative to the welfare of the society whereas social insurance is antithetical or has a contradictory concept as it is a universally funded financial safety net administered by the state.