Learn about the key characteristics of mutual insurance societies and why they are a popular choice for many individuals and businesses.
Co-Operative Insurance Benefits.
In co-operative insurance the insurance contract is between the one and the same people. There is no exploitation, nor any other element of doubtful nature and it is perfectly within the guideline of the Islamic law. It is just a co-operative organization of ordinary citizens to create a fund to pay in and pay out in case of loss. It is very beneficial institution and can very successfully achieve the objective of security and guarantee against common danger for the employees.
Co-operative insurance is merely the application of the cooperative principles to the field of insurance. The aim of co-operative organization is to establish a business enterprise vested with continuity and permanency and not to be dependent on any of its individual members.
Benefits:
A Co-operative insurance society is very easy to form and run with the co-operative of all its members who are active workers as well as policy holders. It has great many advantages for the people.
- If realizes the interests of the people and brings solidarity among their rank and file.
- Policy-holders make up the administrative body and the common fund and general operation of the insurance societies are strictly under the control and supervision of the Government, so there is no profiteering, exploitation and fraud.
- Funds can be invested in profitable enterprises for the benefit of all members.
- It’s surplus belongs to the members not the shareholder.
- Its terms of contributions are generous and favorable to the members.
- Risk is shared by all the members of a co-operative insurance society. Individual loss is spread over a large number of people.
- It reduces the cost of production and the number of lapses and risk probability. It increases safety and raises the moral standard of its members through development of the cooperative spirit and sense of responsibility.
- All the members live together , work together, they full realise that the loss is peril will be taken out of their own pockets. This realization on the part of the members will develop in them a high sense of duty and responsibility.
- It eliminates the intermediary agents and evils of the agency system is selling policies for profit – making.
- In addition to material benefits, co-operative insurance has great educational and organizing value. It helps them to establish a network of social institutions for the welfare of the members.