Life is full of uncertainties, that’s why insurance is available that can be used as a guarantee. In this world there are 2 types of insurance, namely conventional insurance which is already present and known to the public, and Islamic insurance. Both have the same function that is minimizing risk. Then, what is Islamic insurance and the difference with conventional insurance?
In general, insurance is a form of coverage or agreement between the two parties, namely the insurance company and the policy holder.
Where the policyholder has an obligation to pay dues every month with a certain amount according to the agreement, to the insurance company.
Islamic insurance is insurance based on Islamic principles. In accordance with MUI Fatwa Number 21 / DSN-MUI / X / 2001, namely Sharia Insurance ( Ta’min , Takaful , or Tadhamun ) is an effort to protect and help each other among a number of people / parties through investments in the form of assets and / or Tabarru ‘ which provides a pattern of return to face certain risks through an agreement (engagement) in accordance with Islamic law.
Insurance companies that already use sharia principles, all operations and performance will be overseen by the National Sharia Board (DSN) formed by the Indonesian Ulema Council (MUI) and the Sharia Supervisory Board (DPS).
In addition, regulations regarding sharia insurance are also set forth in SK Director General of Financial Institutions No. 4499 / LK / 2000 concerning Types, Assessment, and Limitation of Investment of Reinsurance Companies with Sharia Systems and PP No 39/2008 regarding the second amendment to PP 73/1992 concerning the operation of Insurance Business : sharia insurance licensing, increase in working capital to establish sharia insurance and compulsory DPS.
Types of Islamic insurance
Before choosing Islamic insurance, we must know the types of Islamic insurance in Indonesia, including the following.
- Life insurance, also called Life Takaful. Is a type of insurance that is common in Indonesia. This insurance minimizes risks that occur and are related to physical, such as health or death. Examples of this type of insurance are health insurance and life insurance (death).
- General insurance, also called General Takaful. This insurance minimizes risks that occur due to losses suffered by customers or policyholders. Examples are vehicle insurance, and fire insurance.
- Reinsurance. Reinsurance is an institution that has the duty to bear the risk of insurance companies with the concept of sharing of risk.
Well, that was a brief review of Islamic insurance and several types. Hopefully help you to understand about the concept of Islamic insurance.