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".
