Basic knowledge of social insurance

Social insurance refers to a social and economic system that provides income or compensation for people who lose their ability to work, are temporarily unemployed or suffer losses due to health reasons.

The social insurance plan is organized by the government, forcing a certain group to use part of its income as social insurance tax (fee) to form a social insurance fund. Under certain conditions, the insured can get fixed income or loss compensation from the fund, which is a redistribution system, and its goal is to ensure the reproduction of material and labor and social stability.

In China, social insurance is an important part of the social security system, occupying a core position in the whole social security system. In addition, social insurance is a contributory social security. The funds are mainly paid by employers and workers themselves, and the government finances give subsidies and bear the ultimate responsibility. However, workers can only enjoy the corresponding social insurance benefits if they fulfill their statutory payment obligations and meet the statutory conditions.

Main differences between social insurance and commercial insurance

Social security is the basic guarantee for social members when necessary, not for profit; Commercial insurance is the commercial operation of insurance companies, aiming at profit. Social insurance is enforced according to national legislation, while commercial insurance follows the principle of freedom of contract and is voluntarily insured by enterprises and individuals.

Social insurance is raised, managed and distributed by special institutions set up by the state, targeting social members within the legal scope; Commercial insurance is managed by insurance companies, and the insured can be anyone who meets the underwriting conditions.

Social insurance provides the most basic protection for the insured, which is higher than the social poverty line and lower than 50% of the average social wage, and the degree of protection is low. The level of protection provided by commercial insurance depends entirely on the agreement of both parties and the amount of premium paid by the insured. As long as the insured meets the insurance conditions and has a certain ability to pay, he can get a high level of protection.

Refer to the above content: Baidu Encyclopedia-Social Insurance