Knowra Social insurance Social insurance Social insurance pools contributions, usually through public programs, to provide income or services when people face risks such as unemployment, disability, illness, or old age.
Social insurance contributions : Payments collected from workers, employers, or both to finance social insurance benefits. These payments build the shared funds from which covered risks are compensated.
Old-age pension : A regular benefit paid to people who have reached a specified age, often after a working life. Retirement pensions are among the largest and most familiar social insurance programs.
Friendly society : A member-based association that provides mutual aid, including financial support during illness, injury, or death. These voluntary associations supplied forms of pooled protection before many state insurance systems.
Means-tested benefit : A public benefit whose eligibility or amount depends on a person's income or assets. Social insurance commonly relies on insured status or contribution records instead of a current poverty test.
Income redistribution : The transfer of income among people or groups through taxes, benefits, and public policy. Social insurance redistributes across income levels, generations, and realized risks.
Pay-as-you-go pension system : A pension arrangement that uses current contributions to pay benefits to current retirees. It shows how social insurance can transfer resources between generations rather than save each contribution.
Unemployment insurance : Temporary income support for eligible workers who lose their jobs. It pools the risk of job loss and can stabilize household income during unemployment.
Otto von Bismarck : The Prussian statesman who led German unification and introduced pioneering social insurance laws in the 1880s. His government established early national sickness, accident, and old-age insurance programs.
Universal basic income : A regular cash payment made to everyone in a population without a means test or work requirement. It offers income security without linking entitlement to contributions or a covered contingency.
Automatic stabilizer : A fiscal policy feature that counteracts economic fluctuations without new legislative action. Unemployment benefits rise during downturns, supporting household spending as jobs disappear.
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