Principles of Social Insurance

📄 Other By CampusDown Wiki Editorial Team Last updated October 15, 2026

Quick answer: social insurance is compulsory state insurance against social risks such as illness, old age, unemployment and injury; contributions are earnings-related and benefits follow need, so it redistributes income.

Contents

1. Origins
2. Core principles
3. Versus private insurance
4. Versus public assistance
5. Korea
6. References

Origins

Bismarck's 1883 health insurance came first; Britain's National Insurance Act (1911) and the Beveridge Report (1942) built social insurance into social security systems.

Core principles

Compulsory membership prevents adverse selection and spreads risk.
Minimum income protection
Social adequacy over individual equity
Earnings-related contributions with redistributive benefits
Benefits as earned rights, without means tests
Financing by worker and employer contributions plus the state, funded or pay-as-you-go

Versus private insurance

Private insurance is voluntary, prices by individual risk, rests on contract and seeks profit; social insurance is compulsory, adequacy-based, statutory and non-profit.

Versus public assistance

Public assistance is tax-funded, means-tested and remedial; social insurance is contributory, preventive and broadly universal.

Korea

Industrial accident (1964), health (1977, unified 2000), national pension (1988), employment (1995) and long-term care insurance (2008). Tax-funded schemes such as the Basic Pension are not social insurance.

References

Beveridge, W. (1942). Social Insurance and Allied Services. HMSO.
Rejda, G. E. (2012). Social Insurance and Economic Security (7th ed.). Routledge.
International Labour Organization. (1952). Social Security (Minimum Standards) Convention (No. 102).
「사회보장기본법」 제3조.

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This article was last updated on October 15, 2026. It is based on widely recognized original works and textbooks; when citing it in a paper, please check the original sources listed in the references.