Social insurance must calculate a certain percentage borne by the insured according to the probability of occurrence of various risk accidents and the total amount of benefit expenditure estimated in advance according to the payment standard, which shall be used as the standard for determining the insurance rate. Moreover, unlike commercial insurance, the calculation of social insurance premiums, in addition to risk factors, also needs to consider more socio-economic factors to achieve a fair and reasonable rate.
Hualu.com. How social insurance premiums are collected.
1.Proportional premium system.
In this way, the insurance premium is calculated based on the salary income of the insured person and a certain percentage is stipulated. The main purpose of social insurance is to compensate the insured for the loss of income during the period of risk accidents, so as to maintain his minimum livelihood, so it must refer to the income on which he usually depends, on the one hand, as the standard for measuring benefits, and on the other hand, as the basis for calculating premiums.
The biggest drawback of the work-based proportional insurance premium system is that the burden of social insurance is directly linked to wages, and whether both employers and employees pay social insurance premiums or one of them pays social insurance premiums, the burden of social insurance is manifested in an increase in labor costs, which will lead to the crowding out of labor by capital, which will lead to an increase in unemployment.
2.Equal premium system.
That is, regardless of the income of the insured person or his employer, the same amount of insurance premiums will be charged. The advantage of this system is that it is simple to calculate and easy to implement universally;In addition, countries that use this method to collect insurance premiums generally adopt an equalization system when making payments, which means that all revenues and expenditures are equal. But the drawback is that low-income earners pay the same premiums as high-income earners, which is clearly unfair in terms of affordability.
Contribution to social insurance contributions.
The main body of social insurance premiums is the state, enterprises and individuals. The different combinations of these three entities give rise to many cost-sharing methods, even in the same country, different insurance cost-sharing methods may be used in different social insurance programs, among which the employer and employee contribute and bear the ultimate responsibility is the most common.
In the method of sharing insurance costs between employers and employees, several situations can be subdivided:
1.Rates are equal to the proportion.
2.Differential rate sharing system.
3.Rates are proportional to the progressive system.