"A contract (policy) in which an individual or entity receives financial protection or reimbursement against losses from an insurance company".
Insurance is a means to protect you from the risk of loss of property and assets due to unfortunate events. For example, it protects one from the loss of income due to demise of earning member of family. The insurance can compensate for the loss incurred due to certain pre-specified perils and will provide specific sum to the family of the insured deceased to meet their expenses when the insured person is no more alive or is permanently unable to earn. Generally speaking, there are two types of insurance, based on the type of risks it covers.
Islamic Definition (Takaful) - Shariah-based Approach to Protect You and Your Family:
"Originated from Arabic language and supported by Shariah. Meaning “Joint or Mutual guarantee” where participants pool their resources in order to help other fellow muslims in the time of need."
Based on the principles of:
- Mutual solidarity