Takaful 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 and gharar.
What is ‘Takaful’
Takaful is a type of Islamic insurance, where members contribute money into a pooling system in order to guarantee each other against loss or damage. Takaful-branded insurance is based on Sharia, Islamic religious law, and explains how it is the responsibility of individuals to cooperate and protect each other.
Takaful insurance companies were introduced as an alternative to commercial insurance companies, which go against the riba (interest), al-maisir (gambling), and al-gharar (uncertainty) principles, that are outlawed in Sharia.
- Evidence on the relationship between Takaful insurance and fundamental perception of Islamic principles – www.tandfonline.com [PDF]
- Determinants of demand on family Takaful in Malaysia – www.emerald.com [PDF]
- What drives consumers to participate into family takaful schemes? A literature review – www.emerald.com [PDF]