Which Insurance is a compulsory insurance plan

Solution

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 (but additional sources of funding may be provided as well. • The program serves a defined population, and participation is either compulsory or so heavily subsidized that most eligible individuals choose to participate.