Sharia insurance is a form of insurance that is run in accordance with Islamic sharia principles. These principles include the prohibition of riba (interest), gharar (uncertainty), maysir (gambling), as well as promoting fairness and togetherness in sharing risks. In sharia insurance, the risks faced are guaranteed by Islamic principles and managed transparently.
History and Development of Sharia Insurance in Indonesia
Sharia insurance was first introduced in Indonesia in the early 1990s. However, its growth began to be significant in the early 21st century with the establishment of Islamic financial institutions, including Islamic insurance. In 2002, the Government of Indonesia issued Law No. 2 of 1992 concerning Insurance Business, which provides a legal basis for the development of Islamic insurance in Indonesia.
The development of sharia insurance in Indonesia continues to increase along with public awareness of the importance of having financial protection in accordance with religious principles. Various financial institutions, both local and international, have invested in the development of the Islamic insurance industry in Indonesia.
Benefits and Advantages of Sharia Insurance
Sharia insurance, as an important part of the sharia-based financial system, offers a number of benefits that not only include financial protection, but also provide peace of mind to customers who want to ensure their finances are protected in accordance with Islamic principles.
Here are some of the main benefits and advantages of sharia insurance:
1. Financial Protection in Accordance with Islamic Principles
One of the main benefits of sharia insurance is that it provides financial protection against risks faced, such as illness, accident, death, or property loss, in a manner that is in accordance with Islamic principles. The advantages of Islamic insurance are also in the Islamic insurance products that are designed to avoid practices that are considered unethical in Islam.
2. Prosperity and Peace of Mind
By having an Islamic insurance policy, individuals or families can feel more calm and financially protected in the face of various life risks. This protection not only provides financial well-being, but also peace of mind, as customers know that they and their families are protected in accordance with religious principles.
3. The Concept of Risk Sharing and Justice
One of the basic principles in sharia insurance is the concept of risk sharing and justice. In conventional insurance, premiums paid by customers are used to pay claims and also for the profit of the insurance company.
However, in Islamic insurance, the premium paid is used to form a common fund (tabarru') which will be used to pay claims of customers who experience a disaster. This approach emphasizes fairness and solidarity in sharing risks among community members.
4. Halal Investment
In addition to providing financial protection, some sharia insurance products also offer investment features that comply with sharia principles. Customer funds collected can be invested in halal financial instruments, such as sharia stocks, sharia bonds, or property investments that do not violate Islamic principles. This provides an opportunity for customers to benefit from investments that are in line with religious values.
5. Fair Profits
Sharia insurance offers fair profits for both parties, namely customers and insurance companies. Profits obtained from the investment of customer funds are shared proportionally between the customer and the insurance company in accordance with the principles of profit sharing (mudharabah) or joint rental (musharakah).
Overall, the main advantage of Islamic insurance is its adherence to Islamic sharia principles, which include the prohibition of usury and practices that are considered unethical in Islam. In addition, Islamic insurance also offers high transparency in the management of customer funds and fair profits for both parties.