Takaful is a co-operative system of reimbursement 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. It is defined as an Islamic insurance concept which is grounded in Islamic muamalat (Islamic banking), observing the rules and regulations of Islamic law. This concept has been practised in various forms since 622 CE. Muslim jurists acknowledge that the basis of shared responsibility (in the system of aquila as practised between Muslims of Mecca and Medina) laid the foundation of mutual insurance. Islamic references
These fundamentals are based on the sayings of the Islamic prophet Muhammad. Based on the hadith and Qur'anic verses mentioned below, Islamic scholars have decided that there should be a concerted effort to implement the concept of takaful as the best way to resolve these needs. Some examples are: Basis of Co-operation: Help one another in al-Birr and in al-Taqwa (virtue, righteousness and piety), but do not help one another in sin and transgression. (Surah Al-Maidah, Verse 2)[Quran 5:2] God will always help his servant for as long as he helps others. Basis of Responsibility: The place of relationships and feelings of people with faith, between each other, is just like the body; when one of its parts is afflicted with pain, then the rest of the body will be affected. One true Muslim (Mu’min) and another true Muslim are like a building, whereby every part in it strengthens the other part. Basis of Mutual Protection: By my life (which is in God’s power), nobody will enter Paradise if he does not protect his neighbour who is in distress. The fundamentals underlying takaful are very similar to co-operative and mutual principles, to the extent that the co-operative and mutual model is one that is accepted under Islamic law. Some Muslims believe insurance is unnecessary, as society should help its...
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Takaful is an Islamic way of doing insurance. This concept has been practiced in Islam 1400 years ago. It proved its viability after several Fatwas which are issued by the Islamic scholars. This research study emphasis on the people awareness about Takaful and level of Takaful awareness was found to be significantly associated with the education of the customers and their perceptions about Takaful operations and its procedures.
In the name of Allah almighty, the most gracious and the most merciful, first of all, I want to express my heartiest thanks to Prof. Ali Mohsin and Prof. Farooq Yahya Butt. Without their support it would not be possible for me to research work. I am very much grateful to Managers their cooperation and support they provided me in my research. Finally my kind regards goes to my family and friends for their encouragement and moral support that enabled me to complete this research within specified time period.
This study is about the awareness about the Takaful as an Islamic insurance which is an alternative of the conventional insurance and its operational procedures. The conventional insurance has the element of “Riba or Interest” which is “Haram” in Islam where as in...
Ikhlas Houseowner/Householder is designed to cover property against the following perils:
4. Aircraft damage
5. Impact damage
6. Bursting and overflowing of water tanks
7. Theft (by forcible entry only)
8. Hurricane, cyclone, typhoon, windstorm
9. Earthquake, volcanic eruption
11. Loss of rent (not exceeding 10% of the total sum covered)
12. Personal Public Liability
IKHLAS House owner Certificate
This Takaful plan covers the BUILDING of home against loss or damage (No. 1 to 12 listed above)
IKHLAS Householder Certificate
This Takaful plan covers the CONTENTS of home, such as furniture, furnishings, household goods, kitchen equipment and other appliances, television and radio sets, and other similar equipment, clothing, personal effects and valuables.
What IKHLAS Motor covers?
IKHLAS COMPREHENSIVE MOTOR
The coverage pays you in the event of loss or damage to your vehicle as well as third party legal liability. It covers the death or injury to a third party, as well as damage to a third party’s property as a result of an accident arising out of the use of your vehicle.
The following benefits will be made available with additional contribution:-
• Passenger Liability
• Liability to passengers
• Windscreen Breakage
• Strike, Riot and Civil Commotion
TK2002 - Takaful and Actuarial Practices
Application for a Takaful operating licence
Semester Jan- 2013
Name: Omar Abdikarim Osman
Matric No: 1000 102
The origins of takaful can be traced back more than 1400 years. Takaful originated within the Arab tribes as a pooled liability that indebted those who committed offences against members of a different tribe to pay compensation to the victims of their heirs. The concept widened to several walks of life, including sea trade, in which participants made contributions to a fund for cover to any group member who went through mishap on sea voyages.
Nevertheless, it was not until 1979, in Sudan, that the pioneer takaful firm was established. The use of takaful as the Islamic alternative to conventional insurance began in 1985 when the Grand Council of Islamic Scholars of the Organization of the Islamic Conference formally gave the required permission. Conventional insurance was considered to be unsuited to Islamic law (Shari’ah) and was to be shunned by Muslims, unless there was no substitute. The opposition to conventional insurance was on the premise that Islamic principles do not permit uncertainty or any interest-bearing assets, both of which are intrinsic factors in conventional insurance business.
The Takaful industry in Malaysia started to...
t a k a f u l
Number 1: August 2005
Takaful in the
Where are we now? Where do we go from here?
Manager, Head of
baj.com.sa/takafulTakaful, or Islamic insurance is a relatively new industry. Although the origin of takaful
can be traced back to Islamic practices 14 centuries ago, the development of takaful in
modern times was initially undertaken in Sudan in 1979 and Malaysia in 1984. The
culmination of this initial development was encapsulated within the 1985 Fiqh Academy
ruling declaring that conventional commercial insurance was haram (forbidden) and
insurance based on the application of cooperative principles, sharia compliance and
charitable donations was halal (acceptable).
During the past two decades we have seen takaful operations opening up in many
countries throughout the world, primarily in Islamic countries and countries with a
large Muslim community. In the Far East, Malaysia has been at the forefront of takaful
development with Bank Negara taking the lead with the introduction of separate
takaful regulations allowing the takaful business to flourish in that country. Singapore,
Indonesia, Brunei have all followed with the development of takaful...
PRINCIPLE OF RISK MANAGEMENT AND INSURANCE
Fatin Syazana Binti Izuddin
Noraisyah Amirah Binti Mohd Shafie
Nur’Aqila Binti Mohamad Zabri 2012271324
NO. | TOPIC | PAGE |
1. | Introduction | 1 – 2 |
2. | Takaful product : Takaful Malaysia | 3 – 6 |
3. | Takaful Hero | 7 – 11 |
4. |Takaful Ikhlas | 12 – 15 |
5. | Conclusion | 16 |
INTRODUCTION TO TAKAFULTakaful is originates from Arabic word Kafalah, which means “guaranteeing each other” or “joint guarantee”. Takaful is commonly referred to Islamic insurance. The tabarru’ system is the main core of the takaful system making it free form uncertainty and gambling. Tabarru’ means donation, gift and contribution. Based on principle of mutuality and cooperation, encompassing the elements of shared responsibility, joint indemnity, common interest and solidarity. Each participant that needs protection must be present with the sincere intention to donate to other participants faced with difficulties. Therefore, Islamic insurance exists where each participant contributes into a fund that is used to support one another with each participant contributing sufficient amounts to cover expected claims. The objective of takaful is to pay a...
With the presence of the prohibited elements such as Riba, Gharar and Maysir in the conventional insurance, it is therefore compulsory for Muslim to find the alternative way to provide them with a better security which is in line with Shari’ah. In 1979, the first modern concept of Islamic insurance was introduced in Sudan which is based on a cooperative model similar to the conventional insurance. Since then, Islamic insurance market or Takaful market has become a fast-growing insurance industry and gained its credibility and respect in international market. In Malaysia, Takaful industry is governed under Takaful Act 1984 and Insurance Act 1996. Among the leading Takaful companies in Malaysia are Syarikat Takaful Malaysia Berhad, Etiqa Takaful Berhad and Takaful Ikhlas Sdn. Bhd.
DEFINITION OF INSURANCE
A contract of insurance is a conditional contract that involves two different parties in which one party undertakes, against premium, to pay to the other party certain amount (compensation) upon a certain event that occurred only due to pure risk. This contract is regulated by Insurance Contracts Regulation 1985 under Insurance Contracts Act 1984. It is valid and comes into existence by the offer and acceptance between both parties.
THE BASIC MECHANISM AND THE CONCEPT OF INSURANCE
Insurance is not a new concept within Islam. The principle of a person protecting himself against loss or misfortune is even described in the Qur'an through stories of some of the prophets. In Arabic this concept is known as "takaful". It is acknowledged that the foundation of shared responsibility or Takaful was laid down in the system of "Aaqilah", which was an arrangement of mutual help or indemnification. In case of any natural calamity, every body used to contribute something until the loss was indemnified. Similarly, the idea of Aaqilah in respect of blood money or any disaster was based on the concept of Takaful wherein payments by the whole tribe distributed the financial burden among the entire tribe. Islam accepted this principle of reciprocal compensation and joint responsibility.
It is also a generally accepted view that Islamic insurance was first established in the early second century of the Islamic era. This was the time when Muslim Arabs started to expand their trade to India, Malay Archipelago and other countries in Asia. Due to long journeys/voyages, they often had to incur huge losses because of mishaps and misfortunes or robberies along the way. Based on the Islamic principle of mutual help and cooperation in good and virtuous acts, they got together and...
...that is partly due to uncontrollable causes and catastrophic nature of the loss. For individual farmers, this may be hard for them to be bear the loss that they may lose their livelihood from one major event. So, it is important for the farmers to have an investment mechanism as well as insurance cover in order to give them the coverage if their agriculture destroys by the risk of nature.
4.0 The Agriculture Insurance Coverage
Agriculture is subject to vagaries of nature such as flood, drought, tornado, and lightning. Crop insurance is recognised to be a basic instrument for maintaining stability in farm income, through promoting technology, encouraging investment, and increasing credit flow in the agricultural sector. Agriculture Takaful provides insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests and diseases. This is to encourage the farmers to adopt progressive farming practices, high value in-puts and higher technology in agriculture and to help stabilize farm incomes, particularly in disaster years.
In Malaysia, A proposal to introduce crop insurance coverage for farmers has been submitted to the Cabinet for approval this year. According to Agriculture and Agro-based Industries Minister Datuk Seri Noh Omar (2012), the idea was to provide insurance coverage for farmers whose crops were destroyed by natural disasters such as floods or dry spells....