Differences Sharia and Conventional Insurance for Families
Differences of Sharia and Conventional Insurance - Many people still do not really understand the differences of Takaful and conventional insurance, and choose blindly. For example, some consider sharia insurance to be good, or vice versa, without actually considering every aspect of it. As a result, many regret that the selected product turns out to be unable to provide the best benefits for family protection.
If you are really serious about choosing the best protection, but still confused with the differences of sharia and conventional insurance, you can see from several important aspects that distinguish the two forms of insurance.
5 Differences Aspects of Sharia and Conventional Insurance
When comparing between sharia and conventional insurance, it is not just a matter of "one set under Islamic law, one not." There are different things that make them different in terms of service and protection systems. Here are some aspects that play an important role in creating differences Sharia and conventional insurance in family life insurance:
1. Fund management system
In sharia and conventional insurance systems, the focus and method of fund management are slightly different. Conventional insurance has set the premium amount and protection from the beginning, and the system cultivated for the company to get the maximum profit. In Takaful Insurance, fund management aspects tend to be more transparent, because the system based on Islam emphasizes the clarity of the contract.
2. Binding Agreement
Although both are stipulated in the insurance law, Takaful insurance bases its agreement on a contract called the contract of marriage. Meanwhile, conventional insurance bases its agreement on a regular sale and purchase system in the insurance services industry.
3. Risk management system
The fundamental difference between sharia and conventional family life insurance is how risk is managed. Conventional insurance embraces a risk transfer system, in which the risks faced by the policyholder are shared with the company after the policy is paid. While in Takaful insurance, the risks are "shared" to several parties at once through the collection of grant funds.
4. System of insurance fund ownership
Conventional insurance has your money after you pay a regular premium, in exchange for financial protection provided when you have an accident. However, in Takaful insurance, the money you pay is practically managed by the company. In fact, the status of the funds you paid is considered a mutual fund.
5. Profit sharing system
When a conventional life insurance company gets a financial gain, the profits will of course fall into the hands of the company. However, in Takaful insurance, there is a profit-sharing system where profit proceeds belong to the insurance policyholders. This is one of the most prominent aspects of the most widely understood Shariah and conventional insurance differences.
Operational oversight system
In Takaful Insurance, the most prominent thing is the existence of a supervisory system by the National Sharia Board, the body under MUI. This is to ensure that the operations of the Sharia Insurance Agency still uphold the Islamic principles required in it. In addition to supervision in terms of the system, it is also to ensure that the money invested in this program is halal.
Unused funds distribution
If you never withdraw a claim during the coverage period, conventional insurance companies often do not refund your premium money. However, in Takaful insurance, the money can still be returned even if not entirely (because there is little cost taken by the insurance company as a symbol of transaction intent).
Considering the differences of Takaful and conventional insurance is pretty basic, you should research well before deciding to choose the right insurance for the family.