DEFINITION OF INSURANCE AND ISLAMIC INSURANCE

Insurance is a contract, also an agreement between a person and a company, represented by a policy. This agreement is about payment which is the person need to make a regular payments to the company by monthly and the company will pay the reparation if the person is injured or dies. In addition, the company also will pay money to the property or liability if it is damaged, stolen or lost or something injury caused to a third party.

Same going to Islamic insurance. The term that use to the Islamic insurance is Takaful. Takaful's word comes from the Arabic language thats mean the mutual guarantee, which involves a group of participants agreed to mutually insure themselves or certain losses. The members in takaful contribute the money into the takaful company to guarantee each other against loss or damage. Takaful-branded insurance is based on Sharia which is Islamic law. Takaful companies or Islamic insurance companies were introduced as an alternative for those who want the protection plan which go against the interest(riba), gambling(maisir), and uncertainty(gharar) that are prohibited in Islamic law.

http://www.merriam-webster.com/dictionary/insurance

http://www.investopedia.com/terms/i/insurance.asp?layout=infini&v=5C&adtest=5C&ato=3000

http://www.investopedia.com/terms/t/takaful.asp?layout=infini&v=5C&orig=1&adtest=5C