What is the primary purpose of a social insurance program?

The primary purpose of a social insurance program is to provide protection against financial distress. Social insurance programs, such as Social Security, unemployment insurance, and Medicare, are designed to offer a safety net for individuals during times of economic hardship or life-altering events, such as loss of income due to unemployment, disability, or retirement. These programs are typically funded through payroll taxes and aim to mitigate the risks associated with unforeseen circumstances that can lead to significant financial strain.

In contrast, while encouraging saving and investment might be related to broader economic policies, it is not the main goal of social insurance. Similarly, assisting in job placement or offering education subsidies serves different functions aimed at improving employment opportunities and increasing human capital, rather than directly addressing the immediate financial needs of individuals facing difficulties. Thus, the emphasis of social insurance is squarely on providing support to ensure that individuals do not fall into poverty when faced with adverse situations.