Social insurance and welfare programs can be categorized as social security programs. This is because the financial benefits from the two programs are mainly aimed at providing relief to the poor people, enhancing social protection, assist in wealth distribution and encourage people’s integration. The two programs safeguard the public against the unforeseeable circumstances such as diseases and financial hardships. The employed people are also protected against job loss. People usually sign for either of the program in order to acquire some financial reimbursements incase the insured event occurs. Although no one can be able to compensate an individual fully for the loss incurred, the program aims at aiding the member to take care of the medical charges and daily expenses. The government may also use welfare programs to ensure equitable distribution of resources within its residents. Although social welfare programs can be classified as charitable organization, both welfare programs and social insurance program are characterized with mutual cooperation. It is therefore not appropriate to totally separate the two. However, there are some clear distinctions between the two social security programs. This paper seeks to distinguish social insurance programs from means-tested welfare programs. Among the major distinctions between the social insurance programs and the social welfare programs is the source of funding. It should be noted that social insurance programs is mainly a contributory contract which is entered between the insurance company and the insured party. Different premiums may be set depending on the insurable interest and amount. Various factors are also used when determining the amount of money to be periodically submitted by the contracting party. In most cases the benefits are determined by the primary insurance amount and the age of the policy holder. An individual can opt to take a retirement benefit or even a disability cover which will mature on retirement or disability event. In such a case regular contributions will be required so long as the employees continue to enjoy the cover. The insurance companies use the PIA (primary insurance amount) formula to calculate the benefit that payable to the policy holder. Regulations the PIA will be a function of the average indexed monthly earnings (AIME) (Social Security Administration, 8). On the other hand the social welfare program is usually financed by the government or non-governmental organization to uplift the economic standards of the people within the community. The program therefore acts as a growth and development infrastructure used by the government to distribute its resources to the residents. The program nevertheless aims at uplifting the less fortunate members in the society. The welfare benefit depends on the amount set aside by the government. The social insurance program tends to assist the members to improve their financial status. This is done by reimbursing them with the lump sum amount whenever the policy matures or if the insured event occurs. And if it is a health policy, then the insurance will cater for the medical expenses which the member incurs while ailing. The amount reimbursed by the insurance company in this case cannot exceed