The Basic Concept of Sharia Insurance That Must Be Understood
Islamic insurance is an insurance product that started the popular in 1990 until the early 2000 's. These products are developed according to the number of Sharia savings deals developing in Indonesia. It's been a lot of Islamic insurance products offered by insurance companies in Indonesia.
Many people still think that Sharia insurance product is unlawful because it is a business that aims to benefit in terms of financial. But before You draw conclusions like that, see explanation below so you know clearly the basic concepts of Sharia insurance.
Of the term Sharia, muslim activity covers all related good and bad behavior as well as halal and haram. Sharia is based on the faith and morals as well as relationships with fellow human beings. Although this product is focused to reach out to Muslims, non-muslim communities also allowed for follow Sharia insurance programs by adhering to the existing rules.
The Basic Concept
The basic concept of Sharia insurance is cooperation for mutual protection and tolong-menolong. In this case, the insurance is expected to help fellow Members who are facing natural disasters through a mutually agreed agreement without expecting a unilateral advantage.
The management of these insurance funds from using Sharia Mudharabah principles through investment. This means that the funds collected on Islamic insurance is forbidden to use or invest in things that are not good, such as gambling, unlawful and immoral smelling things. Interest or riba is also not permitted in this insurance.
Then, how do companies get profit?
This insurance has systems for results. So, the results of which have been invested funds will be divided equally between the members and the insurance company. Back to the basic principle that emphasized value was please help without expectation of profit which are detrimental to other members.
The same as the received profit together, the risk of losses the company will also be in the responsibility shared by every Member of the insurance. This also means that any insurance claims are processed using a dependent any member of the Fund. But calm, for every financial activity conducted in this insurance is under the direct supervision of Sharia Supervisory Board (DPS), which ensures that the funds would be used properly according to the concept of Shariah.
Insurance Funds
In contrast to conventional insurance or insurance where the Fund is wholly owned company, Sharia insurance companies only have the right to hold the funds without the right features. So, if a conventional insurance companies use the funds to invest and the result was the property of the company, instead of Sharia insurance companies will be responsible for managing the funds for the benefit of all parties.
In addition if there is a member of the insurance cannot continue monthly premium payment, then the Member is entitled to get a refund of the premium he has issued. In this case, these members only pay enough small pieces in the form of tabarru funds.
So, it can be inferred that Sharia insurance insurance is not unlawful. Because this insurance is run with a good concept, in accordance with the teachings of the Islamic religion and devoted to each other please help between each of the members. But you still need to be cautious before choosing Shariah-compliant insurance you want so as not to get caught up in scams impersonate insurance.