What Is Takaful Insurance

Takaful is shariah compliant insurance option which is grounded in islamic muamalat islamic transactions products.

What is takaful insurance. Takaful branded insurance is based on sharia or islamic religious law and covers. Takaful is a type of islamic insurance wherein members contribute money into a pool system to guarantee each other. Takaful is a system of islamic insurance based on the principle of ta awun mutual assistance and tabarru voluntary contribution where risk is shared collectively by a group of participants who by paying contributions to a common fund agree to jointly guarantee themselves against loss or damage to any one of them as defined in the pact. التكافل sometimes translated as solidarity or mutual guarantee is a co operative system of reimbursement or repayment in case of loss organized as an islamic or sharia compliant alternative to conventional insurance which takaful proponents believe contains forbidden riba usury and gharar excessive uncertainty.

The difference between takaful and conventional insurance rests in the way the risk is assessed and handled as well as how the takaful fund is managed. Takaful insurance is an islamic insurance concept and is a shari ah compliance mutual risk transfer arrangement involving participants and operators. Takaful insurance covers various products such as life takaful motor takaful health takaful etc. How does it work.

Takaful insurance is an islamic concept of insurance. It is a shariah compliant mutual risk transfer agreement which involves participants and operators rather than sellers and buyers. Takaful refers to a shared responsibility or joint guarantee. The idea of takaful originated from the arabic word kafalah which means to take care of or be responsible for.

The takaful system is based on mutuality. This means under takaful there can be various shariah compliant products such as medical takaful motor takaful and more.