Islamic insurance explains the principles of Islamic insurance, Halal insurance also called Takaful. Islamic insurance in the context of Islamic finance and the financial crisis is becoming more and more in many emerging Muslim countries as an alternative to traditional insurance from the point of view of protection and foresight.
Islamic insurance as an Islamic financial product has proven to be a very reliable and trusty investment and provident product compared to traditional insurance products that use the stock market or financial derivatives (speculation) to achieve performance. Islamic or Halal insurance is called Takaful. By definition, Kafalah means to guarantee oneself or a group solidarity guarantee. Takaful is an insurance design that combines reciprocal cooperation, protection and assistance between groups that would participate in an investment. Takaful is above all a form of mutual insurance consistent with Sharia law.
PRINCIPLES OF ISLAMIC INSURANCE
In theory, the Takaful is perceived as a cooperative insurance, where its members pay a sum in a common fund. The purpose of this system is not the benefit but the guarantee of the principle of assisting each other and thereby generating mutual protection (mutuality). What distinguishes Islamic insurance from 'conventional' insurance is mainly the exclusion of three elements that do not conform to the principles of Sharia:
GHARAR
The Gharar manifests itself when the object of a contract is ambiguous, uncertain or dependent on future uncontrollable events A contract containing an uncertain event will be considered not to conform to the principles of Islamic finance.
MAISIR
The insured person pays a small sum in the hope of making a fortune. The insured loses the money paid as an insurance premium in the event that the insured event does not occur. The insurance company will be in deficit if the claims amounts exceed the premiums paid.
RIBA OR WEAR.
The insurance fund invests in the means of financing such as bonds and shares that apply the principle of Riba.
ISLAMIC INSURANCE PRODUCTS
There are three models and several variations of the practice of Takaful:
THE MUDHARABAH MODEL (BENEFICIARY SHARE)
The operator acts as a Mudarib (entrepreneur) with the participants as providers of capital; losses settled by the participants by prior agreement to participate in the profits; the assets acquired through the advanced capital remain the property of the shareholder also known as rabb-al-maal. The net profits are divided between the two parties according to predetermined proportions, while the loss on the capital is the responsibility of the only rabb-al-maal.
THE WAKALAH MODEL (BASED ON FEES)
Operator acts as an agent, manages funds in lieu of participants Receives fees for operating expenses. Wakalah / Mudharabah (based on fee / share) Wakalah for insurance activities and Mudharabah for investment profits.
IS ISLAMIC INSURANCE EXISTING IN THE WESTERN WORLD ?
Yes, in the western world (USA, UK, Canada, Europe, Australia, New-Zealand) the Islamic insurance industry begins to take its first steps with the implementation of many assurances applying the insurance by following the principles of Islamic Sharia, or Takaful. Halal insurance in the western world despite the constraints of legislation that does not provide Islamic finance, has managed to develop a range of products compatible with Islam. But covering a large part of the insurance needs for the Muslim community in France. Thus in the western world nowadays every Muslim can contract the following Islamic insurance: life insurance, savings and investment insurance, health insurance, travel insurance and pilgrimage, repatriation insurance.
TYPES OF ISLAMIC INSURANCE
Halal insurance offers financial coverage on the basis of solidarity in all areas of daily life for the individual, his family or the company. Islamic insurance takes the following forms:
INSURANCE ISLAMIC FOR CAR
An Islamic car insurance is a vehicle insurance coverage in the principles are based on sharia-compliant Islamic finance and an ethical financial transaction. The takaful car which is an insurance that covers against many risks obeys the Islamic principles according to which the premiums of the Islamic insurers are invested in financial products following strict financial laws. A Halal car insurance covers the insured by offering coverage: third party liability, all risks insurance, personal insurance.
ISLAMIC HOME INSURANCE
An Islamic home insurance is a housing insurance that has the role of protecting any Muslim landlord or tenant against the risks associated with a home, but according to the laws of Islamic finance. Halal housing insurance has the same benefits as its conventional insurance policies. The Islamic products of a halal home insurance covers the insurance against: water damage, fire, breakage of ice, burglary.
HALAL REAL ESTATE LOAN INSURANCE
The Takaful real estate aims to repay an Islamic home loan in case of premature death of the insured. A sharia-compliant Takaful plan offers borrowers Bai 'Bithaman Ajil (Halal real estate deferred payment) financial protection in the event of premature death or total permanent disability. Every Muslim or non-Muslim dreams of owning a home - a place where loved ones could gain a sense of security and a home. Buying a home is definitely an important step in a person's life and it is important that steps be taken to look beyond the present and also to protect the future of one's family. With Takaful insurance, you can protect your home and your family against unexpected events, so that they do not have to repay the mortgage or risk losing their home. The Takaful real estate plan in principle is for halal borrowers aged 18 to 65 years. The amount of coverage decreases according to the Takaful insurance contract, making it the ideal choice to guard against life accidents term loans.
ISLAMIC LIFE INSURANCE
Islamic life insurance is a life insurance that strictly adheres to the principles of Islamic and ethical finance. Life insurance is not to be confused with life insurance which is calculated on risks. A halal life insurance is rather a money investment in the long term is whose investment mechanisms are closely framed by Islamic law in place. Life insurance in Islam, as an investment instrument is selective in investments and respects the following principles: ethical investments only, no investment in sectors that do not respect Islam, prohibition to speculate.
ISLAMIC HEALTH MEDICAL INSURANCE
Islamic health or medical insurance is gradually gaining market shares in the health insurance sector in general. This is particularly noticeable in complementary health products. The complementary Islamic health is a mutual health that takes into account the principles of Islamic Sharia but has the same characteristics of coverage as complementary conventional health. Halal medical insurance today can cover the following areas of health: dentist, hospitalization, eyeglasses, hearing aid, spa treatment.
ISLAMIC BUSINESS INSURANCE
An Islamic business insurance is business insurance coverage regardless of its form whose principles are based on sharia-compliant Islamic finance and ethical financial construction. The takaful business which is an insurance that covers against many risks that a business can face obeys the Islamic principles and solidarity within a halal insurance. A halal company insurance covers a contractor by offering coverage for: installations and technical equipment, buildings and materials, raw materials.
ISLAMIC VACATION TRAVEL INSURER
An Islamic travel insurance is an insurance that covers an insured against the risks associated with a trip or a trip, and at the same time complies with the framework of Islamic insurance policies. The takaful trip is a halal insurance cover that does not use the conventional framework of travel insurance, in which the insurance premiums paid by the Muslim insurer land in speculative financial funds that are contrary to Sharia law. Halal travel insurance is a way to supplement the ethics of a trip especially if it is halal holidays for example. Otherwise why opt for halal trips or make a sacred pilgrimage if one uses insurance that speculates on markets in investments that are not ethical. Islamic travel insurance covers the following risks: repatriation in case of illness or accident, loss of luggage, hospitalization and medical expenses.
OMRA HAJJ INSURANCE PILGRIMAGE HALAL INSURANCE
Hajj insurance or Islamic Umrah is an insurance that covers the Muslim assured during his pilgrimages to the holy Mecca with the particularity of respecting in that insurance policy the Islamic principles of sharia finance. The halal pilgrimage insurance is all the more important for the pilgrims, because it will confirm the conformity of the journey and therefore the pilgrimage with the principles of Islam. The Islamic pilgrimage insurance covers Muslims in Hajj and Umrah by offering them: medical assistance on site, travel cancellation insurance, loss of luggage, repatriation.
ISLAMIC REPATRIATION INSURANCE OF HUMAN REMAINS TAKAFUL
An Islamic insurance for repatriation of human body and remains is a cover that respects the law of Islam in terms of takaful. Takaful repatriation was already used informally by Muslim communities abroad prior to its formalization by approved and regulated Islamic insurances. Takaful repatriation allows the Muslim insurer to ensure in the event of death that the cost of repatriation of the body is within the framework of an insurance whose contributions are managed according to sharia law. The Islamic Repatriation Insurance offers the following services in the event of the death of the insured person: Assumption of the repatriation of the body to the cemetery, ticket of return transport for a person accompanying the coffin, package funerary expenses, administrative assistance.
WHAT IS RETAKAFUL ?
Retakaful is a way for any takaful insurer to reduces its risk of reimbursing large islamic insurance claims by insuring a party of its risk with another Takaful company. Retakaful is not different as resinsurance which is also applied within the conventioanl insurance industry.
ISLAMIC INSURER BY COUNTRY