What are the characteristics of social insurance?

Social insurance is characterized by universality and mutual assistance.

Universality means that social insurance covers all social workers, and mutual assistance means using the joint efforts of participants to help a person in danger, help each other and meet urgent needs. The objective basis of social insurance is the risks existing in the labor field, and the object of insurance is the workers themselves. Insurance funds come from the contributions and financial support of employers and workers, and the scope of insurance is limited to employees, excluding other social members.

The insurance coverage is limited to all kinds of risks in labor risks, excluding other risks such as property and economy. As an important tool of demand management, social insurance system plays an active role in economy. The effective use of social insurance funds can promote the sustained prosperity of the economy, and social security has become the basic condition for enterprises to recruit talents.

Main differences between social insurance and commercial insurance

Social security is the basic guarantee for members of society 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 established by the state, and its target is 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.