Chapter 18 RSM Exam Questions and
Answers with Verified Solutions | Latest
Updated 2026
Social insurance programs Government programs designed to
address social
risks, provide economic security, and
cover risks
that are difficult to insure privately
Purpose of social insurance Solve complex social problems, insure
difficult
risks, and provide a minimum level of
economic
security
Key characteristic of social Programs are compulsory for most
insurance participants
Income floor concept Social insurance provides a minimum level
of
income rather than full income
replacement
Social adequacy vs individual Benefits are based on societal needs
equity rather than
proportional contributions of individuals
, Relationship of benefits to Benefits are loosely related to earnings
earnings rather than
strictly proportional
Legal basis of benefits Benefits are prescribed by law rather than
private
contracts
Means testing in social insurance Formal means testing is generally not
required
Funding approach Full funding of future benefits is not
required
OASDI (Social Security) Federal program providing retirement,
survivor,
and disability benefits to eligible workers
and
dependents
Year Social Security enacted 1935
Coverage of Social Security Covers over 90% of workers, including
most
private-sector and many public-sector
employees
Fully insured status Requires 40 credits to qualify for
retirement and
survivor benefits
Answers with Verified Solutions | Latest
Updated 2026
Social insurance programs Government programs designed to
address social
risks, provide economic security, and
cover risks
that are difficult to insure privately
Purpose of social insurance Solve complex social problems, insure
difficult
risks, and provide a minimum level of
economic
security
Key characteristic of social Programs are compulsory for most
insurance participants
Income floor concept Social insurance provides a minimum level
of
income rather than full income
replacement
Social adequacy vs individual Benefits are based on societal needs
equity rather than
proportional contributions of individuals
, Relationship of benefits to Benefits are loosely related to earnings
earnings rather than
strictly proportional
Legal basis of benefits Benefits are prescribed by law rather than
private
contracts
Means testing in social insurance Formal means testing is generally not
required
Funding approach Full funding of future benefits is not
required
OASDI (Social Security) Federal program providing retirement,
survivor,
and disability benefits to eligible workers
and
dependents
Year Social Security enacted 1935
Coverage of Social Security Covers over 90% of workers, including
most
private-sector and many public-sector
employees
Fully insured status Requires 40 credits to qualify for
retirement and
survivor benefits
