California Life and Health Insurance Practice Exam

The reason for social insurance is to?

1. Promote economic growth

2. Protect certain vulnerable segments of the population

3. Enhance workforce productivity

4. Encourage private insurance

The correct answer is: Protect certain vulnerable segments of the population

The primary purpose of social insurance is to protect certain vulnerable segments of the population. Social insurance programs are designed to provide financial assistance and support to individuals who are at risk of experiencing economic hardship due to circumstances beyond their control, such as unemployment, disability, or retirement. These programs, which can include Social Security, Medicare, and unemployment benefits, offer a safety net that helps ensure basic needs are met for those who may not have the financial means otherwise. While promoting economic growth, enhancing workforce productivity, and encouraging private insurance may be indirect benefits of a social insurance system, they are not the core reason for its existence. The main focus is on providing protection and support to individuals who might face significant financial difficulties, thereby fostering a more equitable society.