Difference between Sharia and Conventional Insurance

There are so many things that we must look at before we finally decide to choose an insurance. Many types of insurance from insurance companies are offered to us. If asked, of course we want to be protected with the best insurance without having to be burdened with large premiums every month. Today, many insurance companies only offer pleasure at the beginning but give problems later. Those of us who are tempted by attractive offers at the beginning, of course, can get trapped and have to pay expensive fees until a time we never know.

Those of you who don't want to get losses in the present and in the future should start looking at the difference between conventional insurance and Islamic insurance. There are several differences that we can really see and of course currently the development of Sharia-based insurance has grown rapidly in Indonesia. In order to differentiate between conventional and Sharia-based ones, it's a good idea to read some of the information below first.

The Object of Haram Free Sharia Insurance Guarantee

One of the clearest differences between conventional insurance and Sharia insurance lies in the object to be guaranteed. As the name suggests, Sharia-based insurance must be insurance that provides guarantees for an object that is free from haram elements. Those of us who want to provide protection for cars or houses must clearly know that cars and houses are free from haram elements. Corruption houses and cars, of course, cannot be guaranteed with Sharia-based insurance because everything will be seen on the completeness and source of funds when you buy the house and car. Land that is in dispute or a car that is not equipped with a clear document will also not be insured.

If you choose conventional insurance, usually the origin of the object to be guaranteed doesn't really matter because the most important thing is the monthly premium payment to provide protection for the intended object. In addition, there are other things that are also characteristic of Sharia-based insurance. All insurance provision will be directly supervised by the Sharia Supervisory Board which is not owned by conventional insurance companies.

Sharia Insurance Risk Management

Apart from the things described above, another thing that also distinguishes between Sharia-based and conventional insurance is risk management. In Sharia-based insurance, risk management is based on the principle of sharing of risk or is borne by the insurance company and also on the participants. This is of course different from if you choose conventional insurance. In conventional insurance. The risk will no longer be borne by the guarantee participants but on the company. Management of insurance funds that are Sharia in nature is also more transparent and is used as much as possible to provide benefits to policyholders.

If you choose conventional insurance, the insurance company will certainly determine the monthly premium burden plus some additional costs that will benefit the company. By recognizing the characteristics and differences between Islamic insurance and conventional insurance, you are expected to be able to immediately determine the best insurance for you. Whatever type of insurance you want to choose, you still have to consider all aspects and of course always be careful before finally deciding which insurance coverage from the best insurance company for you. The development of Sharia-based insurance companies in Indonesia is also growing rapidly and will make it easier for you to finally choose the best insurance.