Sharia Insurance: How to Determine Your Target Market

SHARIA INSURANCE -One of the most important parts of running a successful business is knowing exactly who your target market is, and then tailoring your products and services to them. 

While this may seem self-evident, there are many businesses that miss the mark by not thinking about their target market specifically enough, which can result in lost revenue. 

When it comes to sharia insurance, here are some tips for determining the target market for your particular business.

What is sharia insurance?

Sharia law, or Islamic law, is a set of principles that all Muslims are expected to follow. These guidelines are divided into five categories which include personal hygiene, food and drink, marriage and family life, earnings and spending money, and society. 

Sharia insurance is an innovative concept that provides shari'ah-compliant life insurance products for Muslim customers in accordance with the requirements of Islamic law. 

According to the latest industry reports, there is a growing demand for Sharia compliant insurance from Muslim individuals and organizations. 

The target market for sharia insurance includes those who want religious guidance when it comes to making financial decisions as well as those who believe in living their lives according to Islamic beliefs. 

The objective of this type of insurance is not only limited to protecting people's physical assets but also their spiritual one by following strict religious standards when it comes to lending, saving and investing money. 

For instance, banks and investment funds can offer shari'ah compliant products such as savings accounts, mortgages, pension funds and endowment policies. 

As more international organizations enter the global marketplace they can access local companies that offer sharia compliant services through global Islamic investments (GII). 

In addition to these benefits many Muslims find peace of mind knowing they have adhered to the teachings of Islam through investments. 

Furthermore, some international business travelers may be required to obtain additional coverage so they will not be penalized if they need medical treatment while abroad. 

Regardless of your reasons for wanting Sharia compliant insurance, you should consult with a professional before choosing a plan to make sure you choose wisely.

When do Muslims need sharia insurance?

Muslims need sharia insurance when they don’t meet the criteria for conventional insurances, like health, home and auto. 

For example, Muslims who are in good health but are unable to get life or disability insurance because of their faith would be able to obtain a sharia-compliant life or disability policy. 

There are two types of policies that might apply here: halaal policies and takaful. A halaal policy will exclude any products or services that violate Islamic law from its coverage, while takaful is a form of shared risk financing whereby participants contribute money into an investment fund based on their ability to share risks with other members. 

These funds are then used to pay claims incurred by members in proportion to the amount each member contributed. Takaful can also provide protection against business losses if there is some kind of natural disaster or equipment failure. 

It's important to note that every situation is different, so it's best to consult a local advisor before signing up for either type of policy. It should go without saying, but many people wonder why Muslim consumers have difficulty getting coverage in general. 

The answer has more to do with demographics than anything else. According to the Pew Research Center, about one percent of Americans identify as Muslim, which means companies may not want to risk alienating customers by selling them what amounts to specialized products. 

However, as the United States becomes increasingly diverse due to immigration and global trade--especially since 9/11--it stands to reason that insurers will soon follow suit.

Islamic bank versus conventional bank

The Islamic bank is a specialized type of bank that operates in accordance with Sharia law. The conventional bank is the traditional, Western-style commercial bank. A conventional bank can provide Islamic banking services, but not the other way around. 

This means that if you have an Islamic business, you will need to find a suitable financial institution for your needs. 

Finding the right one may require some research and trial and error, so don't be discouraged if you don't find what you're looking for immediately. 

Once found, they'll work with you to set up your account, which should include all aspects of Sharia law as well as compliance issues. Keep in mind that it's not just about following religious law. 

It also has to do with taxation (i.e., accounting and tax laws) and transactions (like bankruptcy). To ensure you make the right decision when selecting an Islamic financial institution, ask these questions: 

1. What are their fees? 

2. What are their deposit rates? 

3. Is it compliant with my country’s regulations? 

4. Are they supported by reputable investors? 

5. What types of loans does the company offer? 

6. Will the company help me acquire funding from sources like sukuk or ijara? 

7. Does the company provide investment products like takaful and musharaka financing? 

8. Do they offer sharia advisory services? 

9. Do they provide Islamic credit cards or insurance products? 

10. Does the institution conduct any activities that go against Islamic principles (i.e., gambling, usury)? 

11. Can I manage my money online? 

12. Can I invest online? 

13. What type of customer service do they provide? 

14. Does the company give out calculators on their website to allow users to calculate whether a certain product is permissible according to Sharia Law or not? 

15. If yes, how does this calculator work and how accurate is it considered to be?

Life insurance – life insurances in Malaysia

Life insurance is a must for any person who wants to maintain financial security in the event that they're not around anymore. With life insurance, family members will be able to get on with their lives after you're gone. 

With life insurance, your loved ones will have peace of mind knowing that they'll still be provided for financially even if something were to happen. 

The best way to determine your target market would be by asking yourself what type of customers would benefit from this product and how often they purchase it. 

For example, those people who are employed are more likely to purchase life insurance than those who aren't working. Likewise, parents who have children might buy life insurance policies because it's likely that they'd want to leave some money behind for their children or grandchildren. 

Generally speaking, there are three types of life insurances available in Malaysia: term-life insurance, universal-life insurance and whole-life insurance. 

Term-life coverage only covers someone up until a certain age whereas whole-life coverage includes both term and whole life coverage. 

Universal life insurance policyholders can invest their premiums so that they earn tax deferred interest. Additionally, if somebody doesn't need the death benefit anytime soon, then term-insurance may be a better option.

Medical insurance – medical coverage in Malaysia

Medical insurance is a form of insurance that pays for medical expenses. It is typically used in the event that a person becomes sick or injured and requires medical treatment. 

Medical insurance helps ensure they have sufficient funds available to cover the cost of their care. Sharia-compliant health insurance, also known as takaful, is an Islamic alternative to conventional medical insurance. 

This type of plan is structured as a cooperative rather than a profit-seeking venture and provides coverage for treatments deemed permissible by Islamic law. 

There are both local and international firms offering this type of coverage, so it is important to do your research before signing up with one. 

Once you know what you want out of your health insurance policy (covered services, deductible amount, length), start comparing plans with companies in Malaysia that offer the features you are looking for. 

For example, if you want coverage for maternity care but don't need emergency care, find a plan with those criteria. 

However, if you require emergency treatment only, be sure to choose a company that does not offer maternity benefits. 

Some factors to consider when deciding on which provider to sign up with include quality of service, price and reputation. 

You should also make sure you understand what the terms of your contract mean before signing anything; all contracts contain different conditions and exclusions that might not be apparent at first glance.***