Introducing Prudential's Sharia-Compliant Life Insurance Business

IQRAISLMI.MY.ID -Prudential has launched its own Sharia-compliant life insurance business in the UK, as well as announcing plans to offer similar products in the Middle East and North Africa (MENA) region by 2016, the company announced today. 

Prudential’s new offerings will include savings and investment solutions, as well as two new types of life insurance policies: an endowment assurance plan and an investment linked term assurance plan, both of which are Sharia-compliant...

Why do Muslims need Islamic Financial services?

Muslims do not believe in the concept of interest, so conventional savings accounts are out of the question. Islamic financial services offers a variety of products that conform to the principles of Islamic law. 

For example, some Muslim countries require all banks to offer a type of loan called Qard Hasan, which is an interest free loan that charges no fees and has no collateral requirements. 

However, it is important to note that these services are only available in Muslim majority countries. Another popular product offered by Islamic Financial Services companies is Takaful, or life insurance policies that follow Sharia law. 

Takaful makes up 50% of life insurance policies in Muslim countries and can be divided into three categories: obligatory (wajib), recommended (mustahab) and optional (mubah). 

In comparison, Western insurers usually divide their life insurance policies into just two categories: whole life or term plans.

Who is Prudential?

Prudential is one of the world's largest life insurance companies and a global financial services leader. Headquartered in Newark, NJ, Prudential offers a diverse range of products for individuals and groups through its operating subsidiaries. 

As of December 31, 2017, the company had $1.76 trillion in assets under management and administration worldwide. Its operations span Asia, Europe, Latin America, the Middle East and Africa. 

The company's 3G Capital subsidiary has investments in leading businesses such as Budweiser beer (Anheuser-Busch InBev), Burger King Worldwide Inc., Tim Hortons Inc., Kraft Heinz Company, HJ Heinz Company and Avianca Holdings S.A. 

It also has smaller investments in Starbucks Corporation and Dunkin' Brands Group Inc. In recent years, Prudential has made a number of acquisitions to increase their international presence and support the long term sustainable growth ambitions. 

These include acquiring First National Financial Services from Fairfax Financial Holdings Limited in 2013, SCOR Global P&C from SCOR SE in 2015; Converium Holding AG from Zurich Insurance Group Ltd. and Allianz SE in 2016; Pioneer Investment Management from London Stock Exchange Group Plc., New York Stock Exchange LLC, Chicago Mercantile Exchange Inc.

What does Prudential offer?

Prudential is proud to announce the launch of its dedicated Sharia-compliant life insurance business, underwritten by a reinsurer with a strong track record in this area. 

Launching an innovative product in the UK market was a natural next step for us, and we're looking forward to bringing it to other countries. 

Our Sharia-compliant products are designed to reflect the needs of Muslim customers and offer them an alternative way of accessing the financial security that life insurance can provide. 

Our new business will be managed separately from our traditional business, which means that your local adviser won't be able to offer you these products at present but they will be able to signpost you to another specialist who can. 

We are working on ways that you may be able to purchase these products through your bank or broker instead. We hope to launch this service later in the year. In the meantime, if you need any help please contact our customer service team. 

Alternatively, speak to one of our advisers about what type of protection is right for you and how best to go about protecting your loved ones. 

As part of our Sharia-compliant policy, we offer payment terms that allow for deferred monthly instalments, enabling people with irregular incomes to build up their savings over time. 

Unlike some forms of investment, life insurance has tax advantages too - as there are no gains made on the premiums paid out during the lifetime of the policyholder. 

If you have any queries or would like more information then call us now - alternatively chat live online using our messaging tool.

How to buy a policy?

If you are interested in purchasing a life insurance policy that is Sharia-compliant, Prudential has made the process as easy as possible. 

All you have to do is go to their website and fill out an application form. Once you submit your application, our team of experts will contact you to assist with determining the type of coverage that best suits your needs. 

They will then send you a proposal which includes all costs and benefits of the selected plan. The proposal will be emailed to you for review at your convenience before purchase so that if there are any discrepancies or questions, they can be addressed before signing any documents. 

There are some Islamic beliefs about death and dying that may affect the type of life insurance you need. For example, according to Islam, life begins at conception. 

Therefore, it would not be permissible for an insurer to offer abortion coverage on a family plan because it would be seen as terminating human life prior to birth. 

It would also not be permissible for Muslims (or Jews) to participate in health care decisions where they believe they would become directly involved in causing death through treatments such as organ transplantation.

For whom are these policies designed?

Prudential has launched a dedicated Sharia life insurance business in the United Arab Emirates. The products are designed for Muslims who follow the Islamic code of conduct, which forbids them from investing in interest based investments. Customers can purchase plans with fixed premiums and death benefits as well as term plans. 

The new venture is a joint venture between Prudential and Dubai International Islamic Bank (DIIB). Prudential is confident that this new line of business will be profitable due to the number of Muslims living in this region. 

DIIB has also seen an opportunity to offer its clients financial products that meet their requirements. Furthermore, there are more than 5 million Muslims living in the UAE alone. 

There is a potential market size of around $3 billion given that only 2% of Muslims have purchased insurance policies according to a survey conducted by Ernst & Young Middle East earlier this year. 

Meanwhile, the Muslim population in Asia Pacific has grown steadily over the last few years reaching 654 million people or 13% of all Muslims globally. As such it is possible that both regions could see an increase in demand for Islamic insurance products.

Protect your loved ones now and in the future with Sharia compliant life insurance.

In the first of its kind, the world's largest life insurance company, Prudential, has launched a dedicated Sharia compliant life insurance business. 

This move is in response to the growing Muslim population and their need for a product that complies with Islamic law. 

The new insurance product will be available in Malaysia and Indonesia at launch, but has plans to expand globally as demand warrants. 

Islamic law prohibits transactions involving speculation or gambling, so traditional term life policies were not an option. 

The product addresses these prohibitions by investing funds in Shariah-compliant funds instead of traditional investment vehicles such as stocks and bonds, thus aligning it with Islamic principles. 

The innovation allows customers to purchase both term or whole life coverage on a regular monthly basis without having to make large upfront payments or surrender earnings from other assets for premiums. 

Customers can also choose to use either their zakat (charity) savings, the sale proceeds from a property or even donated money. 

A key feature of this policy is that it allows the customer to buy additional cover for dependents while they are still alive, helping them fulfil one of Islam’s fundamental tenets which obligates parents to protect and provide for their children.

Terms & conditions apply.

Prudential, one of the world's largest life insurers, today announced the launch of a new business dedicated to providing sharia-compliant life insurance. 

This is a first for an insurer of this size and it could provide a critical source of much needed capital for Islamic investors. 

The announcement comes as several major banks are shutting down Islamic banking branches in the wake of falling oil prices. 

Experts say that investing in companies like Prudential will be crucial for Muslim nations seeking to maintain financial stability in the face of increasing economic uncertainty. 

As with any form of investment, there are risks involved in investing in sharia-compliant life insurance, but experts also point out that such risk can actually be used by smart investors to their advantage. 

With more demand than supply, investors stand a chance of getting competitive returns on their investment while at the same time reducing risk. Unlike traditional investments which involve speculation, sharia-compliant life insurance involves a fixed return. 

A low level of risk coupled with reliable cash flow makes it an attractive option for conservative investors looking to safeguard their wealth in these difficult times.