Insurance Concept: insurance study materials
Insurance-promise of reimbursement in the case of loss; paid to people or companies so concerned about hazards that they have made prepayments to an insurance company.
Insurance-written contract or certificate of insurance
Insurance -protection against future loss
Insurance- in its basic form is defined as “ A contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event."
Insurance-promise of reimbursement in the case of loss; paid to people or companies so concerned about hazards that they have made prepayments to an insurance company.
Insurance-written contract or certificate of insurance
Insurance -protection against future loss
Insurance- in its basic form is defined as “ A contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event."
► Insurance, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known small loss to prevent a large, possibly devastating loss. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance.
Takaful ( التكافل) is an Islamic insurance concept which is grounded in Islamic muamalat (banking transactions), observing the rules and regulations of Islamic law. This concept has been practiced in various forms for over 1400 years. Muslim jurists acknowledge that the basis of shared responsibility in the system of aquila as practiced between Muslims of Mecca and Medina laid the foundation of mutual insurance.
The principles of Takaful are as follows:
► Policyholders cooperate among themselves for their common goods.
► Every policyholder pays his subscription to help those that need assistance.
► Losses are divided and liabilities spread according to the community pooling system.
► Uncertainty is eliminated in respect of subscription and compensation.
► It does not derive advantage at the cost of others.
Nature of Insurance:insurance study materials
1. Sharing of Risk: To share the financial risk.
2. Co-operative Device: All of the losses by group of people.
3. Value of Risk: evaluate before insuring to charge.
4. Payment at Contingency: If contingency occurs, payment is made.
5. Amount of Payment: depends upon the value of loss.
6. Large No. of Insured Person: share the loss at a cheaper rate.
7. Insurance is not a gambling and is not charity.insurance study materials
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