Takaful Insurance
Principles of Takaful
The principles of Takaful are as follows:
- Policyholders cooperate among themselves for their mutual benefit.
- Every policyholder contributes a subscription to support those in need.
- Losses are shared and liabilities are distributed according to the concept of community pooling.
- Uncertainty is minimized with respect to contributions and compensation.
- No participant derives advantage at the expense of others.
Theoretically, Takaful is regarded as a form of cooperative insurance, where members contribute a specified sum of money into a common pool. The objective of this system is not profit-making, but rather to uphold the principle of “bearing one another’s burdens.”
Commercial insurance is generally considered impermissible for Muslims by most contemporary Islamic scholars, as it contains the following prohibited elements:
- Al‑Gharar (excessive uncertainty)
- Al‑Maisir (gambling)
- Riba (interest)
There are three main models, along with several variations, through which Takaful can be implemented:
- Mudharabah Model
- Wakalah Model
- A combination of both models
Family Takaful
- Protection for Life’s uncertainty
- Protection for your Children’s future
- Protection for your Home
General Takaful
General Takaful is a short-term policy contract where participants pay contributions whilst Takaful Companies undertakes to manage the risk. below are some of the covers that can be provided among a lot of others:
- Personal Accident Protection Plan
- Home and Belonging Protection Plan
- Liability Protection Plan
- Assets Protection Plan