A mathematical modelling in determining the portion of Tabarru’ fund for sharia life insurance based on wakalah scheme

Galuh Oktavia Siswono*, Wawan Hafid Syaifudin, Wisnowan Hendy Saputra

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

1 Citation (Scopus)

Abstract

The development of sharia products in the Muslim country is growing rapidly, especially in Indonesia, where the majority of the population are Muslim. One of the developing sharia products in Indonesia is sharia life insurance. Sharia life insurance is a sharia insurance product to anticipate the risks contingent with life that might happen to its policyholder. In this research, we consider sharia life insurance with a Wakalah bin Ujrah contract or Tijarah contract. In this contract, the premium from the participants or policyholders would be divided into three funds. There are wakalah fees, investment funds, and Tabarru’ funds. Tabarru’ funds are the funds that will be used to pay the benefit if a contingent life event happens. In this research, we are interested in optimizing the portion of Tabarru funds based on the premium paid by the policyholders for the purpose that the insurance company can meet its future liabilities regarding death benefit payment. We build a model by using Equivalence Principal (EP) assumption and perform simulations using the data of Indonesia Mortality Table IV 2019. The results show that the portion of Tabarru’ funds in premiums increases with the increasing age of policyholders and years of coverage.

Original languageEnglish
Title of host publication3rd International Conference on Mathematics and Sciences, ICMSc 2021
Subtitle of host publicationA Brighter Future with Tropical Innovation in the Application of Industry 4.0
EditorsRudy Agung Nugroho, Veliyana Londong Allo, Meiliyani Siringoringo, Surya Prangga, Wahidah, Rahmiati Munir, Irfan Ashari Hiyahara
PublisherAmerican Institute of Physics Inc.
ISBN (Electronic)9780735442146
DOIs
Publication statusPublished - 11 Oct 2022
Event3rd International Conference on Mathematics and Sciences 2021: A Brighter Future with Tropical Innovation in the Application of Industry 4.0, ICMSc 2021 - East Kalimantan, Indonesia
Duration: 12 Oct 202113 Oct 2021

Publication series

NameAIP Conference Proceedings
Volume2668
ISSN (Print)0094-243X
ISSN (Electronic)1551-7616

Conference

Conference3rd International Conference on Mathematics and Sciences 2021: A Brighter Future with Tropical Innovation in the Application of Industry 4.0, ICMSc 2021
Country/TerritoryIndonesia
CityEast Kalimantan
Period12/10/2113/10/21

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