PAGE- 13- SOCIAL INSURANCE

Social insurance is any government-sponsored program with the following four characteristics:

the benefits, eligibility requirements and other aspects of the program are defined by statute;
explicit provision is made to account for the income and expenses (often through a trust fund);
it is funded by taxes or premiums paid by (or on behalf of) participants (although additional sources of funding may be provided as well); and
the program serves a defined population, and participation is either compulsory or the program is heavily enough subsidized that most eligible individuals choose to participate.[1]
Social insurance has also been defined as a program where risks are transferred to and pooled by an organization, often governmental, that is legally required to provide certain benefits.[2]