### The General Purpose of Insurance Products
Generally, the purpose of insurance products is to provide a sense of security when facing life risks, such as health and life risks, which cannot be predicted.
Therefore, you have several options for insurance products to protect you and your family, such as life insurance or health insurance, whether from conventional insurance or sharia insurance.
Before choosing the type of insurance you need, it is advisable to first understand its advantages, such as the benefits and strengths of each available insurance product.
### What is Sharia Insurance?
This time, let's delve deeper into sharia insurance products. Essentially, both sharia and conventional insurance aim to provide protection when risks approach us. The difference is that sharia insurance provides an opportunity for policyholders to help each other in goodness among other sharia insurance participants.
This is the advantage of sharia insurance products, which is mutual protection and helping others. So, policyholders not only provide protection for themselves as insurance participants but can also help others.
### Benefits of Sharia Insurance
Here are the benefits and strengths of sharia insurance products:
1. **Mutual Help through Tabarru’ Fund**
The principle of mutual help (takaful or ta’awun) is carried out through asset investment or Tabarru'. Tabarru’ is a form of contract made for the purpose of charity and mutual help, not purely for commercial purposes. Tabarru’ is what differentiates and becomes the advantage of sharia insurance products. The Tabarru’ fund deposited by sharia insurance participants will be used to help other participants if a risk occurs. Besides getting financial protection benefits through mutual help, participants can also invest.
2. **Distribution and Allocation of Underwriting Surplus**
In sharia insurance, there is a term called Underwriting Surplus. The Underwriting Surplus is the positive difference between the total contributions of participants to the Tabarru' Fund after deducting the payment of claims/compensation, reinsurance contributions, and technical reserves, within a certain period. This is not known in non-sharia products.
In sharia insurance, the Underwriting Surplus can be allocated to several allocations: the Tabarru' Fund, policyholders, and the insurance company. Of course, the calculation is in accordance with the percentage set in the policy. If there is an Underwriting Deficit, the insurance company as the manager, through a Qardh contract, will provide interest-free loans from company funds to be channeled into the Tabarru' Fund as a source of payment for customer claims.
3. **Profit Sharing According to the Contract**
The principle of sharia insurance products is that no party feels disadvantaged. Why? Because sharia insurance companies only manage the funds from participants. So if there is a profit from the management of these funds, the results will return to the participants. Thus, both the participants and the sharia insurance company will get profit sharing according to the contract used.
4. **Riba-Free**
Riba comes from the term riba fadhl, which means surplus (fadhl). Hence, riba fadhl is the surplus or addition of quantity in the transaction of similar goods, such as money, gold, wheat, or other items, whose amounts are not equal. Conventional insurance is categorized as containing riba because the amount of premium paid by the participant is not equal to the amount of claims or compensation they receive. The exchange between the premium and the claim is also not done simultaneously. Investments in conventional insurance are also placed on riba-based instruments.
Conversely, sharia insurance is said to be riba-free because no participant's funds are forfeited. Sharia insurance will provide customers with claims, compensation, or Underwriting Surplus. Moreover, the funds received will be managed in investment instruments that comply with sharia principles, supervised by DSN-MUI and OJK. The investments offered in sharia insurance also use clear contracts, so participants are more comfortable.
5. **More Transparent**
The management of funds by sharia insurance companies is done more transparently, both in terms of the use of participant contributions, Underwriting Surplus, and profit sharing. When there is an Underwriting Surplus, the insurance company will divide it into three parts, the value of which is stated in the contract. This profit-sharing includes parts that go to the Tabarru' Fund, parts given to participants, and parts given to the insurance company.
Profit sharing is also done proportionally. This means that participants who contribute more will also receive more profit sharing. The provisions regarding profit sharing stated in the contract from the beginning of the agreement show that sharia insurance is transparent.
6. **Supervised by the Sharia Supervisory Board to Ensure Transactions Follow Sharia Principles**
The Sharia Supervisory Board (DPS) supervises the fulfillment of sharia principles in the business activities of sharia financial institutions, including sharia insurance. This is possible because DPS members are recommendations from the National Sharia Council (DSN) MUI.
Besides acting as a supervisor, DPS also functions to approve transactions conducted by sharia insurance to ensure they comply with Islamic sharia principles. For example, determining which instruments can be used as investment portfolios by sharia insurance.
### Sharia Insurance Products
One of the sharia life insurance products that can provide these advantages is MiSmart Insurance Solution Syariah (MiSSION Syariah) from Manulife Indonesia.
This is a sharia insurance product from Manulife Indonesia that provides life protection, optimal investment, and end-of-program benefits of Sharia Life Insurance in accordance with Islamic sharia principles.
The 3-in-1 solution (Life Protection, Investment, and Health) will provide comfort and peace of mind in facing risks.
Additionally, MiSSION Syariah allows participants the flexibility to choose contributions according to their needs. MiSSION Syariah also includes health insurance as an additional insurance and offers total participant Loyalty Benefits of up to 750%.
Therefore, the benefits and advantages of sharia insurance products not only provide protection and comfort in life but also allow you to share blessings and help others with sharia insurance.
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