Unforeseen events and emergencies can happen to anyone. It can lead to the loss of a loved one or some prized possessions. Humans have always been planning for their future. In order to protect ourselves from such situation and assure that we will get some financial support, we buy insurance. There are different types of insurance policies but the one known in Islam is Takaful or Shariah Insurance. Takaful meaning is providing guarantee in an Islamic way.
It is a type of insurance system in Islam that is based on the laws of Sharia or Islamic principles. It is a system in which money is pooled and invested. It is a mutual risk transfer arrangement in which both parties will share the profit and loss equally. Here we have everything you need to know about it.
Principles of Takaful in Islam:
The main ideology of Takaful is to bear other person’s burden and there is no profit in this system. Some of the important principles of takaful are as follows:
- For the common good the policyholders will corporate with each other.
- The contribution of the policyholders is considered donations.
- To help those who need assistance, all their policyholders will pay their share.
- The liabilities are shared according to the pooling system of the community and losses are divided.
- According to compensation and subscription, there is no uncertainty.