What is takaful?
Takaful is a protection plan based on
Shariah principles. You contribute a sum of money to a common takaful fund in the form of
participatory contribution (tabarru'). You undertake a contract (aqad) to
become one of the participants by agreeing to mutually help each other, should
any of the participants suffer a defined loss.
Sharing of surplus for takaful
One unique feature of a takaful plan is the sharing of
surplus of the fund between you and the takaful operator based on pre-agreed
ratio.
The surplus is arrived at after deducting expenses such as
claims, re-takaful, technical reserves and management expenses.
You are entitled to this surplus if you had not made claims
during the period of takaful.
For example, a takaful operator has total surplus
(S) of RM4 million and total general contribution (GC) of RM10. You contribution
(C) for the year is RM1, 000 and surplus will be shared between you and the takaful
operator at pre-agreed sharing ratio (PSR) of 50:50. The share of
surplus that you will receive is calculated as follows:
Surplus sharing ratio = PSR: 50% x S: RM4 million
GC: RM10 millon
= 20%
Surplus attributable
= Surplus sharing ratio x C: RM1, 000 to you
= RM200
Shariah Supervisory
Council is a must for takaful operators
To ensure compliance with Shariah principles:
Takaful operators are required to set up Shariah Supervisory
Council, which advise management and ensure that their activities comply with
Shariah principles.
The National Shariah Advisory Council on Islamic
Banking and Takaful have been set up at Bank Negara Malaysia (BNM) to
advise BNM on the Shariah aspects of the operations of Islamic banking
institutions and takaful operator, as well as of their product and services.
Takaful products and services
There are two types of takaful business:
Family takaful
|
General takaful
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A combination of protection and long-term savings, usually covering a
period of more than one year.
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Protection on a short- term basis, usually covering a period of one
year.
|
Provides financial benefits if you are inflicted by tragedy, as well
as investment profits.
|
Provides protection for any loss or damage that may inflict your
properties or belongings.
|
Risk covered:
• Premature death
• Illness and permanent
disability
• Regular income during
retirement
|
Risk covered:
• Property loss and
damage
• Liability arising from
damage caused by yourself to a third party
• Accidental death or
injury to a third party
|
Periodic contribution payments- monthly, quarterly, semi-annually or
annually.
|
One time contribution payment.
|
Main products:
• Ordinary family
(mortgage, health, education and riders)
• Annuity (regular
income during retirement)
• Investment-linked
|
Main products:
• Motor
•
Fire/houseowners/householders
• Personal accident
|
Top 6 Basic principles of takaful
1.
You must have a legitimate financial
interest in the subject matter to participate in a takaful plan.
2.
A takaful contract is based on the
principle of utmost good faith (trust), whereby you need to disclose all
materials information required.
3.
You can only recover your financial loss and not
gain any profit as a result of a quantifiable loss.
4.
In determining the compensation, the takaful
operator will identify the actual most important cause that brought
about the loss.
5.
After you have been compensated for your loss,
the takaful
operator has the right to claim from any third party responsible for
your loss.
6.
If a loss is covered by more than one takaful
plans or insurance policies, the takaful operator that has made
payment to you may call upon other takaful operators or insurance
companies to contribute proportionately to the payment.
