What is the difference Sharia Insurance with Conventional Insurance

There are some differences between Islamic insurance with conventional insurance, the difference is:

1. According to the contract used

In conventional insurance contract based on sale - buy, while the Islamic insurance contract on the basis of helping.

2. Operational

• In the conventional insurance funds collected from the participants belong to the company, while the Islamic insurance funds collected from customers is a customer-owned. Insurance companies are not the owner just as the manager of the fund.
• In the conventional insurance fund uses interest (usury) as the basis for the calculation of the investment, while in the Islamic insurance based on the profit-sharing investment funds
• In the mechanism, do not recognize Islamic insurance fund as found charred in conventional insurance, if the contract period the participant is unable to continue payment of premiums and want to resign before reversing period, the fund that has been entered can be retrieved
• Payment of claims on Islamic insurance funds were taken from all participants are merit since AWL has been in Relax that there is provision for funds to be used as helping fund among the participants in case of disaster. While in conventional insurance claim payment is taken from the account of company funds.
• Profit sharing in Islamic insurance company is divided among the participants in accordance with the principle of profit sharing with the proportion who have been determined, whereas in conventional insurance all profits belong to the company.

3. Monitoring System

In Islamic insurance have Sharia Supervisory Board, so the insurance operations do not deviate from Islamic sharia, while in conventional insurance no Sharia Supervisory Board.