Islamic finance continues to grow with various innovations, one of which is waqf insurance. This instrument is still less known in the community, even though it has great potential to provide sustainable social benefits. Insurance waqf allows insurance participants to endow a portion of their insurance benefits or investment returns to support various social and religious programs.
Waqf insurance is a concept in which Islamic insurance participants can endow part of their insurance benefits for social purposes. Thus, in addition to getting financial protection, participants also contribute to amal jariyah. This scheme is different from regular sharia insurance, which only focuses on individual risk protection.
In general, the insurance waqf mechanism involves participants choosing to endow a portion of their claim or premium value. These funds are then managed by a waqf institution and channeled to various projects for the benefit of the people, such as the construction of mosques, schools, hospitals, and assistance for the poor.
The National Sharia Council of the Indonesian Ulema Council (DSN-MUI) through Fatwa No. 106/2016 has regulated the insurance waqf mechanism with several provisions, including that participants can endow a maximum of 45% of insurance benefits and a maximum of 30% of investment benefits, waqf funds can be disbursed at the time of claim submission, and the collected funds will be managed by the nazir and distributed to various social sectors in need.
Thus, waqf insurance not only serves as financial protection, but also provides long-term benefits for the wider community. For example, an insurance participant states in the contract that if he dies, a portion of his claim benefit of Rp100 million will be endowed. The funds are then used to build a school or other public facilities. This shows that insurance waqf can be a financial solution that has a broad social impact.
With waqf insurance, participants not only protect themselves and their families, but also contribute to social development and the welfare of the community. Therefore, recognizing and understanding insurance waqf is an important step in supporting a more inclusive and sustainable Islamic financial system.
