FAQ

Definition: Takaful is an insurance system based on Islamic principles. It serves both social and commercial needs.
Key Differences from Conventional Insurance:
Interest (Riba): Conventional insurance involves interest-bearing investments, which conflicts with Islamic principles.
Gambling and Gharar: These elements are unacceptable in Takaful.
Takaful System: Shareholders establish a Takaful company.
Participants contribute donations (Tabarru) to create a pool of funds.
The company invests these funds (e.g., in mutual funds, equity markets, real estate).
If a participant faces a catastrophe (e.g., accident, theft), they are compensated from the pool.
Surplus funds are distributed back to participants at year-end.

Wakalah Model:
The Takaful operator (Wakeel) manages the pool.
The operator receives a stipulated fund management fee.
Mudarabah Model:
The Takaful company invests its own funds.
Profit sharing ratio agreed upon with participants.
Surplus/profit distributed based on pre-agreed ratios.

Contributions are considered donations (Tabarru).
The operator manages the fund (charges management fees in Wakalah model).
Surplus amounts, if any, are distributed among participants.