Social Insurance

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Social Insurance Social insurance is a concept where the government intervenes in the insurance market to ensure that a group of individuals are insured or protected against the risk of any emergencies that lead to financial problems. Examples of social insurance include: Social Security, Unemployment Insurance, workers compensation or workman's compensation. Social insurance is considered to be a type of social security, and in fact the two terms are sometimes used interchangeably. According to ILO, only 27% of the world’s population enjoys access to comprehensive social security systems, whereas 73% is covered only partially or not at all. The first compulsory social insurance programs on a national scale were established in Germany under Chancellor Otto von Bismarck: health insurance in 1883, workmen’s compensation in 1884, and old-age and invalidity pensions in 1889. Today is a universally accepted and adopted by nations. Social insurance provides protection against certain risks in the economy that private insurance fails to deal with. Private insurance often becomes extremely unaffordable due to the issues of adverse selection and moral hazard. Social Security provides a foundation of income on which workers can build to plan for their retirement. It also provides valuable social insurance protection to workers who become disabled and to families whose breadwinner dies. To qualify for Social Security, some jurisdictions an employee to serve for at least the required age stipulated by the law example15 years. In some jurisdictions they look at retirement age individuals must be 60, 62 or over. In some jurisdictions social insurance is managed by the state in others it is privatize to life insurance companies. some of the issues face in developing a more adequate social insurance system, are gaps in the protection scheme and in general the amounts paid as premium are too low to cover the risk exposure. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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