According to Takaful Malaysia,
Both takaful and conventional insurance provide protection in the event of unforeseen events and
contributions must be made to start the coverage.
Insurance is the transfer of risk by an individual or an
organisation, i.e. your business, to the insurance company.
You or your organisation will thus be known
as the policy owner. The insurance company receives payment in the form of premium and will
compensate you in the event of covered losses or damages sustained by you.
Takaful provides protection based on Shariah principles.
By contributing a sum of money to a common
takaful fund in the form of contribution (‘Tabarru’), you will undertake a contract (aqad) to become one
of the participants by agreeing to mutually help each other, should any of the participants suffer a
Both insurance and takaful have similar basic principles. For instance, the insured must have a legitimate
financial interest in the risk you are insuring, meaning you must suffer a financial loss when the insured
Your insurance or takaful contract is a contract of utmost good faith (trust). Thus, you as
the certificate owner need to disclose all material information required.
If any of the relevant material
facts are not disclosed, the certificate may be invalid and you will not be protected against any loss or