What is Insurance?
We face dangers, accidents, losses and sickness in the course of our work and even in normal conduct of day to day affairs. Though nobody can guarantee life and safety of individual from accidents and calamities except Allah, the Insurance companies promise to pay our dependants and descendants a substantial amount as compensation if we die or fall sick or suffer losses.
The insurance is of two types, i. life insurance and ii-general insurance. Under the life insurance, the next of the kin of the those insured get a substantial amount if he meets an untimely death. Under general insurance, houses, jewellery, goods in a warehouse, goods being exported by ships or flight or even cars, ships and planes or heavy machines of a factory could be insured against damage or natural calamities. Generally each of these activities is carried out by separate agencies.
The principle in Insurance is that the agency collects small amount of money every month or year from a large number of people in a town or city or country. But since deaths, calamities or accidents are rare occurrences, the agency has to pay out little by way of Insurance to those who die or fall sick or suffer losses. More than the actual benefit, the Insurance schemes provide a sense of security to people.
It may be noted that houses could be insured against calamities such as earthquake or floods while cargo in a ship on the seas is insured against sinking.