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Chapter 6 - page 10

S

ST6_aspirant

Member
Hi all,

Chapter 6 page 10 (top) reads:

Benefits for individuals can be provided by:

● the State
● employers or groups of employers
● individuals
● financial institutions
● other corporations.
Financial institutions include insurance companies, banks and investment companies.

My question is:
How is individuals different from insurance companies (under financial institutions)? An individual will provide a benefit for self by buying a personal pension / term / sickness plan from an insurer. If "individual" means that they will use their funds as and when the need arises, is it really called "providing of benefits"?
 
I think the important thing to grasp here is what it actually means to "provide a benefit". As an individual I will provide benefits for myself, such as an income in retirement, by paying premiums to a financial institution now. This makes me the sponsor of my future benefits. When I retire, the financial institution will provide, let's say, an annuity to me. So both the individual and the financial institution could be said to be "providing a benefit".
 
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