Insurance and Takaful.

The word ''TAKAFUL'' is deArived from the Arabic word Kafala, which means to guarantee one another, to help and to take care of one's needs. It is a scheme based on brotherhood, solidariAty, and mutual assistance which provides mutual financial aid and assistance to the participants in case of need whereby the particAipants mutually agree to contribAute for the purpose.

Based on the principle of ta'awun (mutual assistance) and tabarru (voluntary contribution). The operation of the concept must be within the spirit of shaAriah. In conventional insurance, the risk is transferred from the inAsured to the insurer. Takaful, on the other hand, is based on shared risk. Each participant donates to a takaful fund and in the event of loss, the participant will receive the amount of its claim.

Insurance is based on the comAmercial factor and follows governAment laws. Its principle is based on the purchase agreement and its payment is premium. Takaful is based on mutual cooperation among takaful participants based on the Wakalah contract between participants and the takaful operAator. It is followed by Shariah laws and government laws. It is based on the tabarru...