Takaful

2.0 Introduction to Takaful

There has been movement around the world sparked by Muslim’s communities to practice Islam as a whole through the concept of Islam Ad Deen. Therefore, alternatives have been introduced to the world which hold the Shariah principles and practice as their foundation. An alternative to the concept of insurance is the Islamic doctrine of al-Takaful, as adopted by the Islamic insurance operators.

Takaful is not superseding the power or will of Allah in one’s life, death or destiny (Qada’ and Qadar) but is achieving the pleasure of Allah who orders us to “help one another in righteousness and piety”. The main objective of Takaful is providing a level of comfort to the participants against unexpected future define risk through mutual cooperation by a defined group. To minimize the financial impact on your family should unexpected misfortunes happen to you, you might want to consider appropriate Takaful plans so that you can continue to maintain the financial comfort for your family.

2.1 What is Takaful

The term Takaful is an infinitive which is derived from the root word kafi which means guarantee or responsibility. Meanwhile, Takaful whose chief characteristic is al-Musharakah which means sharing. Thus, the word Takaful means shared responsibility, shred guarantee, collective assurance, mutual undertakings. Technically, Takaful from the economic point of view means, a mutual guarantee or assurance based on the principles of al-Aqd (contract) provided by a group of people living in the same society against a defined-risk or catastrophe befalling one’s life, property or any form of valuable thing. Hence, a Takaful is better known as co-operative insurance with mutual agreement, in case of loss, paid to people and companies concerned about hazards, compensated out of a fund to which they agree to donate small regular contributions managed on behalf by a Takaful operator.

2.1.1 Definition of 'Takaful'

A type of Islamic insurance,...