Basically, life insurance services provide mutual benefits system in which neither the insurance company nor the customer will be harmed during the process. Along with the increasing popularity of Sharia banking products, its life insurance services also gain huge attention. Especially sharia system that applied with no usury to be accordance with Islamic law. The funds that has been deposit in sharia life insurance premiums will be manage in a social funds account or also refers as Tabarru. Here’s some of the benefits from this sharia-based life insurance.
Monthly Premium Fees are More Affordable
Every customer need to pay a premium on a regular routine, it can be weekly, monthly, or annually to be provided by benefits according to what is stated in the policy. In this sharia-based insurance, the customer will pay an affordable amount compared to common life insurance products. A lesser amount of premium fees does not mean sharia-based insurance is not safe, for the company that runs sharia-based insurance is always under supervision and already obtained approval from the Sharia Supervisory Board.
Risk Sharing Concept with No Usury
Sharia-based insurance means its services run by a system without usury. It is because all of the funds deposited by the customers will be managed in a social fund account or Tabarru. This means the funds can be used to help other customers who have an accident, or caught in a disaster. Its principle offers mutual benefits as it’s known as risk-sharing.
Also, part of the amount of the funds can be used as an investment settle by a Mudharabah agreement, where the company will manage the investment fund according to that agreement of sharing contract. In this way, there will be no usury, either Maisir (gambling) or Gharar (lack of funds clarity) because the company will calculate the ratio in the beginning of the insurance settlement.
Flexible Time Period
More convenient for the customers, sharia-based life insurance also has a flexible term of the time period that can be adjusted with the customer's needs and financial condition. Here at Danamon Bank, we provides sharia-based life insurance, Prima Amanah Protection where you can purchase by paying a premium starts from Rp 50.000,-. You also allow to choose flexible term of protection between 10-15 years, with return contribution at the end of the protection period when the policy is due.
Fund Management Transparency
The transparency starts from the beginning, where the customers will get detail explanations regarding sharia-based life insurance products that will be offered by the company. Sharia-based insurance is in accordance with Islamic law, and its belief that all parties involved must not feel aggrieved during the period of the services. The transparency keeps going as the company stated a clear information about the profit-sharing concept. For example the ratio information here, Tabarrus’s percentage is 60%, Ujroh is 30%. This clarity will prevent the risk of Gharar.
Large Nominal Compensation for Life Protection
One thing needs to emphasize here is the premium funds paid by the customer remain the customer’s own deposit fund, while the insurance company is only responsible to manage these funds in a Tabarru account. So the concept used by the sharia-based life insurance is simply to deposit funds or Wadiah. It means there will be no charred funds in sharia-based life insurance, and it will give a huge amount of compensation since it deposits in a joint account, Tabarru.
As mention before that, the sharia-based life insurance is in accordance with Islamic law, but you can ensure that it is not only intended for Muslims. So for those who have other beliefs are still welcome to purchase this life insurance. You can settle sharia-based life insurance with Danamon Bank that provides Proteksi Prima Amanah, available in all Danamon’s branches.