Insurance describes properties of the system. A fund is simply an account for settling liabilities. A private insurance company also has a fund for settling lia

Insurance describes properties of the system. A fund is simply an account for settling liabilities. A private insurance company also has a fund for settling liabilities, regulated by law to ensure there are enough assets to cover expected liabilities according to very conservative risk formulas. An entity that assumes liabilities without maintaining such a conservative fund isn't an insurance company--it's just a business venture (high risk) or a bank (low to moderate risk). It's not worth nit-picking because Social Security is a hybrid system. Though structured much like a private insurer, it has a significant progressive element (certainly for its time) and is backed by the full faith and credit of the U.S. in the sense that it only holds U.S. bonds and also in the sense that the national government is expected to either cover funding gaps or adjust the benefits formula. And there are other programs, like SSI, created later and administered by the same departments. It's a complex picture. But if the question is why isn't Social Security better--more progressive, funded differently, etc--you have to look at the history.