Introduction to Takaful in islamic perspective.pptx

The concept in islamic bussiness

1. Introduction to Takaful Takaful derived from the root word kafala which means guarantee, responsibility, security etc. Type of Takaful: 1.General Takaful. It is normally a short-term plan. 2. Family Takaful. It is a long-term plan. Principles of Takaful: Takaful should be free from Riba , Gharar and Maysir Takaful is based on cooperation. Takaful is based on the concept of Tabarru (donation). Indemnity: it is a legal principle that stipulates the Takaful operator to pay full compensation to the participant in the event of an actual loss when the company has adequate protection.

2. Principles of Takaful: Participants should pay monthly contributions to the company. Takaful contract must be clear between participants and Takaful company. The Takaful company should distribute surplus, coverage and any claim fairly without delaying or overlooking participants based on the contract determined by the policy.

3. Issues Takaful Insurance Regulatory framework Shariah accepted laws, fatāwas, decisions of the Shariah board, cases are solved based on Sharīʿah Statutory law, case law, judgements of court, tradition and customs Source of law Quran, Sunnah, consensus, analogy Man-made and lawssecular Company relations The company works as an operator, trustee, manager, and entrepreneur Buyer and seller Advisory board Shariah advisory board is compulsory Shariah advisory board is not formed Investment All investments must be permissible based on Shariah compliance. Not required to follow Shariah Risk Sharing responsibilities for loss or damage. Risk is transferred to another party. Purpose Solely based on mutual cooperation and solidarity Solely based on commercial aspects Element Free from interest (riba’), gambling (maisir) excessive uncertainty (gharar). No restrictions Fund Participants are owners of the fund and the company manages it. The company is the owner of the fund. Nomination In the Family Takaful, the nominee acts as a trustee and distributes the whole wealth among inheritors.  The nominee is the sole owner of the wealth.   Model Muḍārabah(Profit-loss sharing), Wakala, (Agency) Hybrids, Waqif (Endowment) No restrictions