Now a day the insurance is the biggest part of trade cross over the world. No trade is free of it. I mean the insurance is the important part of the trade.
Definition of Insurance
The simple definition of insurance is. It is an agreement which represent by a rule, in which a person or unit receives financial safety or receive repayment against losses from an insurance person or company.
It is known that the Insurance began in the fourteenth century. At that time, the goods of the countries were shipped by ship. Sometimes the ship would sink. And there was a lot of damage. So there was a need for someone to compensate for this loss. So Then insurance began to cover the loss. There are three main types of insurance for these risks.
1) Goods insurance
This is done by the person who wants to insure his property. He pays a fee to the company in a certain amount. This is called (Premium). The (premium) often paid in installments. If the goods are damaged so the company has to compensate financially. Goods that have been insured no harm was done to them. The company will not pay him the premium he has paid however if an accident occurs then the company will definitely compensate for the loss. This type of insurance includes car insurance, ship insurance and house insurance.
2) Liability insurance
If someone has a responsibility, such as the education and training of children, their responsibility to eat and drink, or there is a risk of an accident while driving on the road, So insurance is provided to deal with these responsibilities to support him in case of loss and to compensate for the loss. So these liabilities are insured so that the company can compensate for the financial loss.
3) Life Insurance
This insurance means that the company tells the insurer that if you die during this particular period, the company will pay the money to the heirs with interest. There are many types of insurance, in some cases the period is fixed, now, if he dies within a certain period, the money will go to his heirs, and if he doesn’t die in a certain period, the insurance will expire at the end of the special period, and the money goes back to him with interest. And there are some cases in which the period is not fixed and when he dies, the money goes to the heirs. The main difference is between goods insurance and life insurance, In the case of Goods Insurance, if the risk does not occur, the amount paid will not be refunded. And in case of life insurance, if he does not die in that particular period, the money is returned with interest.
There are three main types of insurance.
- Group insurance
- Mutual insurance
- Commercial insurance
If the government adopts a method in which the group of individuals has the facility to compensate for its loss or gain any benefit this is called group insurance.
For example, employees’ salaries are deducted from a small amount and deposited in a fund, and then in case of death of the employee or an accident, a large amount of money is given to the heirs or to the employee himself. There are many types of insurance.
The advantage of this type of insurance is that people who have the same type of risks create a fund together. And they promise each other that if any of us suffer any loss or accident, this fund will compensate for that loss. It is important to remember that this fund is only for members and their money is deposited in this fund. Then at the end of the year these members calculate if the amount paid is less then more money is deposited from the members and if there is any money left in the fund, it is distributed among the members or put into the fund by them as part of the next year.
The procedure for this insurance is to set up an insurance company. The company adopts insurance as a business. This means that the real purpose is to make a profit. Just like many companies that aim to make money. Then the insurance company issues various insurance schemes. If the person wants to get insurance, the insurance company enters into an agreement with him that you will have to pay so many installments of this amount and in case of loss the company will compensate you for the loss. The insurance company estimates the installments and the risk for which the insurance is taken so that the company gets some benefit. It has an expert to estimate it called an actuary.
At present, the practice of this type of insurance is very common. Many insurance companies have come into being for this. And it makes a good profit. Now the point is that many Islamic scholars have written books on what is the rule of insurance in Islam. In them, he has explained the legal status of insurance and its procedures. Which of the following types of defects are present? Thus, if the insurance and the method of insurance is illegal, then what is the alternative. Because the business is in dire need of insurance, if the merchant’s goods are not protected, they will not be ready for trade and thus the economy will be affected. Therefore, there should be an alternative to insurance.
So let me summarize this alternative a little bit. Because a separate article should be written on it. An alternative to insurance is cooperative insurance. In which the participants voluntarily deposit money in the fund. And those who have suffered any loss during the year are assisted by this fund. Then, at the end of the year, if there is any money left, they should return it to the participants. Or is set aside by participants as part of their fund for the coming year.