What is "social insurance"?

Social insurance refers to a system of insurance that is facilitated by the government to provide financial protection to individuals against various social risks. It is designed to safeguard citizens against issues such as unemployment, disability, old age, and health-related crises. This form of insurance operates on the principle of collective responsibility, where contributions from a broad segment of the population help to fund benefits that can be accessed by those who fall on hard times.

In contrast, the other options describe different types of insurance or scenarios. For instance, private insurance typically involves businesses insuring themselves or third parties against specific risks associated with their operations. Global travel insurance is specifically tailored to cover risks associated with traveling internationally, and voluntary insurance options for family members indicate insurance policies that individuals can choose to purchase but are not mandated or collectively managed. These distinctions highlight how social insurance is fundamentally a collective mechanism aimed at reducing economic disparities and enhancing social welfare.