What is Social Insurance?

Social insurance

Social insurance policy is provided by the government in which the coverage is provided to a group of people against the emergencies that can result in financial loss. In this policy, an individual is not responsible for the loss and premium is collected by the group of people in the form of a fund to get benefits in the future. This policy is based on inheritance and your future generation can also take advantage of this insurance. Social insurance also stores data of every individual and provides benefits according to their contribution.

Why do we need Social Insurance?

Social insurance will help the government to maintain the heritage and the goodwill of society. It will provide help to the government at the time of natural calamity, riots, and terrorist attacks. Social damage is not caused due to any individual, it is mass damage caused due to external factors. The reason why we all need social insurance are:

  • Social insurance is not a retirement program as it also provides disability insurance and life insurance also.
  • Social insurance provides progressive benefits and increases gradually with time.
  • It also provides the foundation of your retirement protection plan.
  • It provides social justice and stability.
  • It will help the government to maintain peace and security in the country at the time of emergency.
  • It also helps to improve the poverty rate of the country.
  • Social insurance also provides income to senior citizens in America and many other countries.
  • Social insurance is provided on a compulsory basis to the people who are seeking to be covered.
  • The income of women is very low as compared to men so social insurance provides special financial help to women.
  • It provides payment benefits to unemployed people to a limited extent so that they can maintain their minimum standard of living.
  • Social insurance serves a demarcated population and participation in the program is essential for eligible candidates.

What types of benefits does Social Insurance provide?

There are several facilities you can avail in foreign countries but the basic three benefits of social insurance are:

Medicare Benefit: Under these people of more than 65 years old and children will get the medical facilities to some extent. This insurance also provides a pension for senior citizens. This policy will provide help to homeless children who are living in orphanages. It gets funding from the revenue of FICA and SECA payroll taxes. 

Unemployment Benefit: This insurance will provide financial support to the people who have to leave their job for some other’s mistake or get fired from the job. It will pay you when you are unable to go on work and can’t earn money. If a person gets disabled in an accident then insurance will provide you monetary benefits, also there are some selected criteria that are covered under this insurance. This insurance provides funds from the state government.

Public Assistance: It gets funds from private organizations such as charities, social or religious groups, and government agencies. It provides help in the time of serious illness or disability. It also provides money to elder people with dependent children, unemployed and veterans. Public assistance also encourages the unemployed to seek for a better job and raise their standard of living. People will also get subsidies under this policy.

What are the forms of public assistance?

Subsidy: Under this, the government will provide money for food, education, house, medical care and fulfill your other financial needs. It provides assistance on the state, private and local levels.

Vouchers: Vouchers are the chits provided by the government or other organizations that contain a specific amount of monetary value and the individual can use this money for specific goods.

Monetary Payments: It provides financial help to the individual on a monthly basis. The help provided to the person is according to the basis of income. To get this facility you have to apply for monetary public assistance and pass-through certain criteria. A good example of monetary help is TANF that provides financial benefits to needy families.

Housing Assistance: Under this, the government will take care of every individual who doesn’t have shelter to live and provide shelter according to their level of income. In certain cases, you will get a house with no charges and in other cases you have to pay a discounted amount.

Universal Healthcare: This will provide medical and financial coverage to all citizens of the country. Every member can avail of a specific number of medical discounts and fix packages of special benefits in health services. Universal health care will work combinedly to get better health outcomes for the patients.

Why is social insurance not like other public aid?

Social insurance is self-financing and doesn’t need any contributions from funds. As we all know that “Getting benefit is our right”, so it will also remove the stigma that is related to public funds. Like in private insurance, you are not restricted or imposed for any type of contribution. You can contribute according to your ability and savings.

What is Insurance policy?

Insurance policy

Every person works hard to earn money so that he can arrange a house, feed his family, start a business, buy a car or other costly items for use. After spending so much money on a costly thing, if it gets damaged then your whole earned money will go in vain. To save yourself from this financial risk you can take an Insurance Policy. The insurance policy will provide compensation for your loss. You have to deposit a small amount of money in the company and at the time of loss it will handle your expenses or provide compensation for the expenditures. You can ensure your shops, house, building, car, bike, mobile phone and all other things that you have purchased for money. All the movable and non-movable things available on the earth can be insured.

How many types of insurance policies are there?

You can find insurance policy for each and every item you are seeing near you whether it is any living thing or non-living thing. There are mainly two types of insurance  

Life insurance policy: Under this policy, the insurance company will insure your life by taking a small amount of money annually. As you all must have heard the proverb “If there’s life, then there’s the world”. So according to this, life is the most important thing anyone can have whether it is the life of your parents, wife, children or yours. Death is uncertain and having life insurance will provide financial security to the family of the policyholder after his demise. These are two types of life insurance:

  1. Term Life Insurance Policy: In this you will get coverage for a specific period of time. If the insured person dies when the policy is in active state, then only you will get the benefit of term life insurance.
  2. Whole Life Insurance Policy: In this you have to pay a premium till your death and after your demise, your family can claim for the benefits of the policy.

Whole life insurance policy is much better and costly than the term life insurance policy. The premium of the policy depends on the age, health and gender of the person. For females the premium amount is low and they can afford to pay that easily. 

Non-life insurance policy: All the non-living things are covered under this policy. Non-life insurance policy includes health insurance, car insurance, shop insurance, liability insurance, travel insurance, business insurance, social insurance and the list is too long. This insurance will provide the coverage for damaged property, reimbursement of hospital expenses or the cost of repairing charges.

What are the common non-life insurance policies available in the market?

  • Health Insurance: Medial emergence can happen with anyone as it is not predefined. Health insurance will take care of your medical expenses if you fell ill or go through a serious disease. It will pay the bills of your hospital, medicines, room rent, ambulance charges and surgery charges. Health insurance also covers your critical illness and long-term diseases, such as diabetes, cancer and Tuberculosis. Many companies also provide the facility of cashless treatment in-network hospitals.
  • Auto Insurance: This insurance basically provides security to your car, bike, scooter or any other vehicle from damage. The damage may be caused due to any natural disaster, accident, riot or burglary, it will protect you from the expenses of repairing. Apart from this, auto insurance will also pay for the medical bills if someone gets injured due to that accident. It will also protect you from litigations and penalties.
  • Accidental Insurance: You are walking on the road and suddenly a car hits you, then you should have to go to the hospital for taking first aid in case you get some minor injuries. But it might be possible that any serious injury can happen. So, at that time accidental insurance will help you in paying the hospital bills. As it is insurance with a low premium, so it has its limitations and clauses which the policyholder has to follow. Certain types of major accidents are excluded from this insurance, as it will cost too much according to the premium.
  • Home Insurance: Home is among the most vital things that a person could need for shelter. If something will happen to your house then it will create a major problem for you to search for a shelter for too long. This insurance will provide you financial security if your home is damaged due to burglary, fire or any natural disaster like flood, cyclone and hailstorm. The insurance company will also provide the expenses for the interiors and electronics items as per the availed coverage.
  • Business Insurance: This insurance is taken by the people who are running a business and provide employment to others. In this insurance you can insure your property, machinery, employees related risks, fall in business due to the operating environment of the business or factory.

What is the procedure for insurance to work?

The insurance company is just like a bucket where people can put their money on a regular basis. So that if any mishap happens with anyone then they can withdraw a limited amount of money to manage their financial loss.

The mishap can be with your home, shop, business, car or any other thing. You can only take money from the bucket for the predefined cause that is mentioned in the contract and not for any personal cause.

The insured person has to claim the reimbursement with the images of damaged property or death certificate in case of life insurance and other related documents that are mentioned in the clause. The insurance company will also investigate the claims whether they are genuine or not.

In what cases you will not be able to take successful claims?

At the time of purchasing any insurance policy you have to provide correct information to the company. It will help you with successful and hassle-free claim settlements. If you will provide the wrong information and it further gets detected by the insurance company at the time of investigation then it may cause a problem for you. The insurance company can also take a legal step on you for forgery and providing bogus information.