Family Takaful

Although family takaful is the Islamic equivalent of life insurance, fundamental differences separate the two systems. A better understanding of the principles behind takaful, the laying down of clearer rules for the formulation of policies and a defined role for agents and brokers are essential if market penetration is to increase.

Family takaful does not mean the insurance of a life, but rather it is a financial transaction which undertakes to protect widows, orphans and other dependents of the assured against future unexpected financial risk. At the core of the system is the notion of al-Mudharabah (profit sharing) without the element of riba (interest), which is proscribed under Shariah law.