Why Sharia Insurance?
Having Sharia Insurance can be one of your efforts to provide protection for yourself and your family in the future. Based on MUI Fatwa No: 21/DSN-MUI/X/2001 concerning General Guidelines for Sharia Insurance, Sharia Insurance is defined as a business that uses the principles of mutual help and sharing in the form of tabarru'. Through this main principle of mutual help, participants are allowed to contribute to each other in terms of goodness and are protected from all risks that can occur at any time to fellow Sharia Insurance participants.
There are still people who question the halalness of Sharia Insurance, so many people are not interested in having Sharia Insurance because they think this protection is not fully in accordance with Islamic law. However, in reality, Sharia Insurance has been formed in accordance with applicable Islamic values and applies Sharia principles.
Here are some Sharia Insurance principles that you need to know:
1. Sharia Insurance Agreement
The contracts entered into by participants with the company consist of a tabarru' contract and a tijarah contract. Tabarru' contracts are all forms of contracts carried out by fellow participants for the purpose of kindness and mutual help, not just commercial purposes. Tijarah contracts are all forms of contracts intended for commercial purposes, such as investments made between participants and insurance companies.
2. Free from "Magrib" (Maysir, Gharar, Usury)
The terms of the sharia insurance contract do not contain elements of maysir (gambling), gharar (uncertainty), usury, and other transactions that are not in accordance with Sharia principles.
Maysir can be interpreted as gambling, where the winning player will take advantage of the losing player.
Gharar can be interpreted as uncertainty in a transaction caused by intangible goods, unclear characteristics, and uncertain prices.
Usury is defined as the provision of additional value obtained from the excess nominal amount of the loan when repaid.
These three things are prohibited in Sharia Insurance so that every transaction must be carried out in accordance with applicable Sharia requirements.
3. Fund Management
Fund management in Sharia Insurance is carried out in accordance with Islamic sharia. Participants act as policy holders who provide grants to help other participants and the company only acts as manager of grant funds. The amount of Sharia Insurance contributions does not include the element of usury and claims are paid based on the contract agreed at the beginning of the agreement in accordance with Islamic sharia.
4. Underwriting Surplus
Tabarru' funds originating from insurance participants will be calculated to determine whether there is an excess difference or not in a certain period. If there is an Underwriting Surplus, namely the excess of the risk management tabarru' funds after deducting compensation payments, reinsurance and technical reserves, then this difference in funds will be given to the participant in accordance with the participant's contract agreement.
Benefits of Sharia Insurance
Basically, all types of insurance have a main focus on providing protection that can provide a sense of security and comfort in the future. However, there are several advantages that Sharia Insurance has:
1. Fund management uses Islamic sharia principles
This is a significant difference between Conventional Insurance and Sharia Insurance. Fund management by Sharia Insurance Companies must comply with sharia principles.
2. Transparency in the management of policyholder funds
Fund management by the Sharia Insurance Company is carried out transparently. This openness is related to the use of underwriting contributions and surpluses as well as the distribution of potential investment value results.
3. Sharing of profits resulting from potential investment value
The potential investment value obtained can be shared between policy holders (participants), either collectively or individually, or the Sharia Insurance Company itself. This distribution is carried out in accordance with the previously agreed contract.
4. Ownership of funds
In Sharia Insurance, some of the incoming contributions belong to the Sharia Insurance Company as the fund manager and the other part belongs to the Policy Holder collectively or individually.
5. The "forfeited funds" system does not apply
Contribution funds (premiums) deposited as tabarru' in Sharia Insurance are not forfeited even if no claims occur during the protection period. The funds that have been paid by the policy holder will continue to be accumulated in tabarru' funds, namely funds deposited by Sharia Insurance participants and will be used to help other participants if certain risks occur.
It is very important for you to choose Sharia Insurance that suits your needs. By choosing a sharia insurance product, you get 2 (two) benefits at once:
