Definition and Benefits of Sharia Insurance
Of course, most of you are familiar with the term insurance. Many modern society today are starting to use insurance products to guarantee their future. There are many types of insurance. You can find health insurance, accident insurance and other insurance.
Insurance also currently has a Sharia basis. Financial financing using a Sharia basis, especially in the State of Indonesia itself, is starting to be in great demand. Considering that Indonesia is a country where the majority of the population is Muslim. Sharia products are emerging from Islamic banks. So what is the meaning of Sharia Insurance itself?
In principle, sharia insurance and general insurance have different ways of working and systems. Sharia insurance is considered as one of the most appropriate places for Muslims to get protection. To find out more about the meaning of sharia insurance and what its benefits are, the following will be reviewed in more detail.
What are the Definitions and Benefits of Sharia Insurance?
Sharia insurance itself is an effort made to protect each other or help each other between insurance policy holders. With this Sharia Insurance, members will be able to help each other between Insurance members.
Furthermore, a return will be given in the face of risk through an agreement or contract based on Islamic law. That is the definition of sharia insurance according to the Indonesian National Sharia Council.
After you know the definition of sharia insurance, then it is also important for you to know what benefits can be offered by this sharia insurance. Sharia insurance certainly has advantages which are not offered by conventional insurance. Following are some of its benefits.
Using the Help Principle
Sharia insurance has a joint account which is known here as tabarru’ fund. It is in this insurance that the premium paid by the members will go into the tabarru’ fund which will then be useful for mutual assistance among members. The collected funds will be used to pay members’ claims when they face a risk.
Managed Using Sharia Principles
As the name implies, this sharia insurance is managed according to sharia principles. Funds that have been collected from members, also known as premiums, will later be placed in types of investments that do not violate Sharia principles or contain usury.
Using a Different Contract
Sharia insurance uses a takaful contract. The takaful contract itself is an agreement to help each other when a risk is faced by one of the insurance members. It’s simple here. If you become a member of the sharia insurance, then when you make a claim for funds, the funds obtained are collected from the membership dues.
No Burned Funds
Sunk funds are known only in conventional insurance. In contrast to sharia insurance, in insurance using this principle you will not be harmed because of forfeited funds. Even if here you do not make a claim against any risk and the coverage has matured, then later the funds can still be withdrawn for you.
That way of course you as a member of sharia insurance will not feel disadvantaged. That’s what makes Islamic insurance finally become very popular today.
Transparent Fund Management Process
All activities that occur within the sharia insurance company are very transparent or open. You can see this starting from the use of contributions, the process of sharing investment results and the total tabarru funds collected which can later be distributed when there is a surplus.
If here you are one of the participants of the insurance that uses sharia principles, then later you can get a report from the insurance regarding the management they have done. The obligation of Islamic insurance companies is to transparently manage the funds that you have deposited so that they do not change owners later.
This effort was deliberately made to avoid suspicion of the practice of misappropriating funds in sharia insurance. So that way the insurance participants will really feel safe and trust the funds they have deposited.
Are Members Really Entitled to Profits?
Members are Entitled to Benefits
The funds that have been managed later will not be wholly owned by the company, but here the funds will be returned to the participants. The amount of profit that can be obtained will be divided equally by the sharia insurance company to all insurance members who take their sharia insurance products.
This system is also strictly prohibited to make the participants feel disadvantaged. So that the process carried out must be truly fair and equitable.
One of the things that distinguishes insurance that uses sharia principles from conventional insurance lies in the point of zakat. In conventional insurance, members will not be required to pay tithe. However, it is different again with Sharia Insurance. In this sharia insurance, participants will be required to pay zakat.
The zakat will later be adjusted to the benefits of funds obtained by the management process carried out by sharia insurance companies. So that the participants will not feel burdened by the existence of zakat. As we know, zakat is something that is obligatory in Islam.