Recognize and Understand the Difference between Syariah and Conventional Insurance Talking about risks, everyone certainly has a risk of life. Why? Because there is always uncertainty about the future.

Then are we ready for the risks that come in life, especially those related to health and finances? In fact, many claimed not to be ready.

Even though you often hear the wise saying, prepare an umbrella before it rains, which more or less means before the risk comes, we must prepare ourselves, especially regarding financial matters.

You have certainly been offered various insurance products such as health insurance or life insurance. But have you ever found out more about sharia insurance?

Did you know that sharia insurance not only helps prepare yourself to face risks, but can also help others? Let’s get to know sharia protection more deeply!

What is Syariah Insurance?

Based on the DSN MUI fatwa 21/DSN-MUI/X/2001 concerning General Guidelines for Sharia Insurance, the notion of sharia insurance is an attempt to help each other and share among a number of people or parties through investments in the form of assets or tabarru which provide a return pattern for dealing with certain risks. use a contract that is in accordance with sharia

The Sharia Insurance Company as the Operator/Manager manages the “tabbaru” funds from the participants to help each other (risk sharing). In practice, Tabbaru funds contributed by participants in Islamic insurance are only used for 4 (four) things, namely; Ujrah, insurance compensation (risk claims), Paying Reinsurance, and Underwriting Surplus.

So, the principle of sharia insurance is mutual help (takaful/ta’awun) where each participant contributes to helping other participants in virtue and provides a sense of security when there is a risk between participants. Therefore, sharia protection can strengthen a sense of caring, brotherhood and mutual cooperation for participants in the concept of sharing risk.

Difference between Sharia Insurance and Conventional Insurance (Non Syariah)

The most important difference between Islamic insurance and conventional (non-Sayriah) insurance is the management concept. Sharia protection has a sharing risk management concept, while conventional (non-sharia) insurance transfers risk.

The concept of conventional insurance management in the form of Transfer Risk is protection in the form of transferring the economic risk of the death or life of someone who is insured to an insurance company as the risk bearer. Or in other words, participants by buying or joining as conventional insurance participants will be borne by the insurance company’s economic risk.

Meanwhile, Sharing Risk, which is the management of Islamic insurance, is a concept in which the participants have the same goal, namely helping each other, namely through investment in assets or tabarru which provides a return pattern for dealing with certain risks using a contract that is in accordance with sharia whose management is represented by an Islamic insurance company with Ujrah reward.

In addition to these basic differences, there are several practical differences between sharia and conventional protection that you need to know:


The contract/contract in sharia insurance is a grant contract (type of tabbarru contract) as a form of ta’awwun (helping/bearing each other’s risks between participants) in accordance with Islamic law. While the contract on conventional insurance is the contract of coverage by the insurance company to the insurance participant as the insured.

Fund Ownership

Protection Syariah implements shared fund ownership (participants’ collective fund). If a participant experiences a disaster, the other participants will help (provide compensation) through a collection of tabarru funds. This is part of the principle of sharing of risk. This sharing of risk does not apply to conventional insurance, where the insurance company manages and determines the customer’s protection fund which comes from monthly premium payments.

Underwriting surplus

The Underwriting Surplus is the excess (positive) difference from the underwriting risk management of Tabarru funds which has been reduced by payments of compensation, reinsurance and technical reserves, which are calculated in a certain period.

Proteksi Syariah distributes the Underwriting Surplus to the participants in accordance with existing regulations and product features that have been agreed beforehand. Whereas for conventional products, there is no underwriting surplus or in other words, conventional insurance underwriting profits become part of the insurance company and there is no distribution to insurance participants.

Has a Sharia Supervisory Board

Unlike conventional, to ensure sharia principles, sharia insurance companies are required to have a Sharia Supervisory Board that performs the supervisory function of fulfilling sharia principles in business activities. ha sharia financial institutions, including sharia protection

Not Performing Prohibited Transactions in Islamic Finance

Transactions in Sharia Insurance must avoid the elements of Maysir (chance), Gharar (obscurity), Riba & Risywah (bribery).


Investments in the form of Tabarru’ are carried out according to Islamic law, so that the investment portfolio will only involve halal instruments.

Sharia Insurance Products

In its development to meet people’s needs for sharia protection, currently sharia insurance products are very diverse in the market. With the same goal and spirit and growing the sharia industry in Indonesia, Manulife Indonesia has a sharia-based product, namely MiSmart Insurance Solution Syariah (MiSSION Syariah) which provides the following benefits:

  1. Maximum Insurance Benefit and Sharia-based Optimal Investment Allocation
  2. Total Loyalty Benefits 750%
  3. Equipped with health insurance as additional insurance
  4. Please help through the Tabarru Fund and the Underwriting Surplus

With a variety of benefits provided, the contribution offered by MiSSION Syariah is affordable, starting from IDR 300,000 per month. Affordable right? Now, completing the comfort of life, sowing blessings and sharing is no longer just a dream.

Advantages of Choosing Sharia Insurance
By choosing a sharia insurance product, participants get 2 (two) benefits at once: First, protection for themselves/personally, and second, doing good by setting aside a portion of the funds to help others. Interesting right?

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