Social Insurance Law and Legal Definition

Social Insurance is a type of insurance sponsored by the government. This type of insurance will be usually issued to persons facing particular peril. Insurance for unemployment is an example for a social insurance. The object of social insurance programs is to transfer the risk faced by employees of an organization to the government. The main characteristics of social insurance are:

1. it provides benefits, eligibility as provided by the Social Security Act;

2. it provides for the accounting of income and expenses through trust fund;

3. it funds through taxes or premiums paid by participants; and

4. it serves a defined population.

Social Insurance is governed by the Social Security Act of 1935.