Some types of insurance cannot be operated on a private basis, e.g. unemployment insurance and health insurance, due to the problem of underwriting. Some people will not be able to have access to insurance due to their higher risk factors, e.g. certain types of occupation or poor health.
These insurances have to be operated by the state (through social insurance) and is made compulsory for every eligible person. There is no need for underwriting, as everybody is covered for the standard benefits,which are usually provided at a basic level. The insured people pay a premium that meet a major portion of the cost and any deficit is usually funded through tax revenue.
There are significant savings in operating a social insurance scheme, as there is no marketing and underwriting expenses. There is lower administrative expenses. The saving in cost can amount to 30% to 40% of the premium that would be charged by a private insurer for a similar set of benefits.
It is possible for a state scheme to be abused but this can be controlled - as it would be a crime to cheat the state. A state scheme may be operated inefficiently, but this can be properly managed.
It is better for the basic needs of the people to be provided by social insurance and for the private sector to provide additional benefits on top of the state benefits.
Tan Kin Lian
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02/14 - 02/21
- Accountant interested in Pro-Investor
- Good response to rechargeble torchlight
- Talk at Pasir Ris Library - Financial Planning in ...
- Increase in motor insurance premiums
- Shared bicycles at University of Indonesia
- Affordable housing - 3 years of average income
- Products at Internet Shop
- Get compensation from distributor
- Biggest speculation of a lifetime
- Insurance brokerage and conflict of interest
- TKL Intelligence Quiz Vol 3
- Social insurance
- Giving up an existing investment-linked policy
- Switching to a new policy with special benefits
- Home: our planet Earth
- SCMP: Government may compete for insurance. Govern...
- Difficult to cross Singapore roads
- Toxic products and traffic control
- Switching between guaranteed and investment linked...
- Watching EPL in 2010
- Resort World Sentosa
- Gift for mothers of new born babies
- Financial Planning book available at bookstores
- Draft letter to MAS on Mini-bond settlement
- Draft letter to Trustee of Minibond
- Fee to swap counter party on Mini bond
- Needs and Wants
- Logic9 (pocket size Sudoku)
- Switching to a limited payment whole life policy
- All in the Family
- Economic strategies committee - real change or jus...
- Cut working week to 21 hours
- Alex Tan's talk at Speaker's Corner
- Slow start for Integrated Resort in Sentosa
- Minimum wage and cost of living
- Speaker's Corner - Singaporeans vs Foreigners
- Minimum wage and cost of a maid
- Welfare in Singapore
- A nice name for big gambling
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