Difference between social insurance and commercial insurance

There is both a connection and an essential difference between social insurance and commercial insurance. From the functional point of view, both of them are the mechanism of social risk mitigation, social insurance is the main body of the multi-level social insurance system, commercial insurance can be used as a supplement to social insurance, is a component of the multi-level social insurance system.

There is an essential difference between social insurance and commercial insurance: First, the nature is different. Social insurance is mandatory by the national legislation, belongs to the government behavior, is a welfare undertaking, has a non-profit nature. Commercial insurance is a commercial behavior, the insurer and the insured is a completely voluntary contractual relationship; with the nature of the profit-making purpose; Second, the purpose is different. Social insurance is not profit-oriented, and its starting point is to ensure the basic life of workers, maintain social stability and promote economic development. The fundamental purpose of commercial insurance is to obtain profit, only on the premise of giving the insured financial compensation; Third, the source of funds is different. Social insurance is borne by the state, employers and individuals. Commercial insurance is completely covered by the insured individual; Fourth, the level of treatment is different. Social insurance from the stabilization of society, focusing on long-term basic life protection, but also with the rise in prices to adjust, gradually increase. Commercial insurance focuses on one-time economic compensation. Fifth, the government's responsibility is different. Social insurance is a basic right enjoyed by citizens. The government assumes the ultimate responsibility of social underwriting. Commercial insurance is subject to the market competition mechanism, the government is mainly in accordance with the law to regulate commercial insurance, in order to protect the interests of investors.

Commercial insurance is mainly the difference between life insurance and social security is:

One, the main body of operation is different, the main rest of the operation of life insurance must be commercial insurance companies. Social security insurance can be handled by the government or its established institutions, can also be entrusted to financial operating institutions such as fund companies banks and insurance companies to manage. Social insurance with administrative characteristics. In our country, the agency that handles social insurance is the social insurance agency authorized by the Ministry of Labor and Social Security.

Two, the behavior of different basis. Personal insurance is the implementation of civil behavior according to the contract, the establishment of the insurance relationship is embodied in the form of insurance contracts, insurance parties enjoy the rights and obligations are also based on the insurance contract. Social insurance, on the other hand, is a governmental act carried out in accordance with the law, and the enjoyment of social insurance is a basic right granted to citizens or workers by the Constitution. In order to ensure the realization of this right, the state must promulgate social insurance regulations mandatory implementation.

Third, the implementation of different ways. The conclusion of personal insurance contract must implement the principle of equality and mutual benefit, consensus, voluntary conclusion, except for a few types of insurance, in most types of insurance in the law is not mandatory. And social insurance is characterized by mandatory implementation, all members of society within the scope of the social insurance law, must participate in all, there is no choice, and for no reason to refuse to pay or late payment of insurance premiums to be levied late fees, and even pursue legal responsibility.

Four, different principles apply. Life insurance is a contract reflecting the relationship between the two parties, the rights and obligations of the two sides are equal, that is, the insurer to bear the responsibility of compensation and payment of insurance benefits depends entirely on the policyholder whether to pay premiums as well as the amount of payment. That is to say, more insurance, less insurance, no insurance. Thus, life insurance emphasizes the principle of "individual equity". On the other hand, social insurance emphasizes the principle of "social equity" because it is linked to the government's socio-economic goals and aims to implement the country's social and labor policies. The level of contributions of the insured and the level of protection is not closely linked, in order to reflect the government's responsibility, regardless of the amount of contributions, the standard of payment is in principle the same, and even some people can be exempted from paying premiums, but the same access to social insurance protection.

Fifth, the protection function is different. The goal of life insurance is to protect the insurance amount within the limits of the damage caused by the insurance accident to pay the insurance premiums. This goal can meet the needs of people's life consumption at all levels, that is, survival, development and enjoyment can be guaranteed through the purchase of life insurance. The social insurance protection goal is to protect the basic needs of members of the community through the payment of social insurance benefits, that is, survival needs, and thus the level of protection is relatively low.

Six premium burden is different. Payment of premiums is the basic obligation of the life insurance policyholder, and the premiums not only include death, disability, illness and other costs, but also includes the insurer's operating and management costs, the policyholder must bear all. As a result, the charges for life insurance are generally higher. On the other hand, social insurance premiums are usually borne by individuals, enterprises and the government ****. As for the proportion of each party's burden, it varies according to different programs and different financial affordability.

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