Concept of Insurance in Islam

I have forever been very bemused about the plan of cover in Islam and its reliability. freshly, I had a conversation on this theme with three of my very close associates and have got some more insight from them. Two of my friends were in favor of assurance in some form and had their own views about the topic, please note that these two have good knowledge of Islam. I would not call them molvis, they are moderate Muslims but have good information on a mixture of subjects in Islam (although this is no yardstick). I will put down my reservations, their answers and a few other views here and would like to have views from the rest of the users here. Please do contribute in the conversation with your own sympathetic (whatever that may be) and please be open in your views as this might clarify some ambiguities they you or others might have. Thanks.

What is Sod (attention) that is stated as Haram (prohibited) in Islam ?
My understanding is that any income that falls under the following criteria

1. Is fixed
2. Is absolutely profit (no risk of loss)
3. Does not involve any effort/ work

investments account in a Bank
To me a savings account in bank is the purest form of interest and is Harem. It give a fixed return over an year, is always a profit over the deposited money and it does not require any work or any effort from me. No risk.

There are two other viewpoint on the bank deposits in savings accounts.
If a family does not have any sources of income and they don't know how and what business to invest in, the interest money from the bank is Halal (allowable). Just to give you an extreme example, if say a women is a widow and her children are young, and there is just the cash that they have and nothing else, the interest money from the bank is HALAL (allowed).
In early days of Islam, when interest was made Haram (prohibited), the currency used to be of GOLD and thei value did not use to depreciate. Gold used to appreciate with rising inflation and people could buy the same amount of goods even after many years of price hike. In modern times, with currency notes in fashion and value of currency depreciating daily with rising inflation, people cannot buy the same amount of goods after one year with the same money that they have now. Keeping money in savings accounts of the banks only safeguards against the possible depression of money in the form of interest. So it is actually not interest and is acceptable.

Insurance
now let’s talk about cover. There are two forms of insurances, insurance of a manufactured goods (object/ material) and life insurance of humans.

Product Insurance
If a person or company owns some product (e.g. car or house or goods) and wants to insure it against any possible harm (e.g. theft, fire, accident etc.), the person or company would get the product insured by some insurance company. There will be some fixed expense in the form of insurance fee that the person or business will pay to the cover company and in-turn the product would be insured. Now if any harm is inflict upon the product, the insurance corporation bears the cost to the tune it is insured. But the key point is that the payment money in the form of insurance fee is not return, if there is no claim.

Life Insurance
Life insurance of a human is a somewhat newer concept as compare to product insurance, which has been there for many centuries (so it is known). In life insurance, a person keeps on making a certain amount of payment for a certain number of years (we have 20 years normally offered by State Life and EFU) and it covers three areas.

1. If the person dies within those 20 years, his family (beneficiaries) receives a handsome sum of money, by now determined at the time of signing the insurance agreement.
2. If the person does not die within those 20 years, a attractive some of money is given to him as profit incurred on the yearly installments of payments he had been production to the insurance company.
3. In some cases, in adding to one of the above, if the person falls ill, his medical operating cost are borne by the insurance company during those 20 years.

My question specially relates to the first 2 points. If the person dies, the family gets a fixed amount of cover money (as is the case with produce insurance). However, in life insurance, if a person does not die, he still gets a fixed profit on his actual repayment in addition to the total real quantity paid to the insurance company.
Now this is a win-win circumstances and this income somewhat falls under my definition of interest i.e. Is fixed, Is absolutely profit (no risk of loss), Does not engage any effort/ work.