Takaful is an insurance concept which is grounded in Islamic Muamalat,
observing the rules and regulations of Shariah. It is a concept that has been in
practice for over 1,400 years.
In principle, Takaful system is based on mutual co-operation, responsibility,
assurance, protection and assistance between groups of participants. In
other words, it is the provision of shared contributions to help those who are in
These fundamentals are based on the Holy Quran and the sayings of Prophet
Muhammad S.A.W. Some of the examples are:
Allah said: “...Help Ye one another in righteousness and piety but help ye
not one another in sin and rancour... (Al Maidah : 2).
Allah will always help His servant for as long as he helps others.
(Narrated by Imam Ahmad and Imam Abu Daud).
Basis of Responsibility
The place of relationships and feelings of people with faith, between each
other, is just like the body; when one of its parts is afflicted with pain, then
the rest of the body will be affected. (Narrated by Imam Al-Bukhari and
One true Muslim (Mu’min) and another true Muslim (Mu’min) is just like a
building whereby every part in it strengthens the other part. (Narrated by
Imam Al-Bukhari and Imam Muslim).
Basis of Mutual Protection
Based on the above basis, Islamic scholars had decided that there should be a
concerted effort to implement the Takaful concept as the best way to resolve
the Takaful Contract
Although the concept of insurance is permissable under Shariah law, certain
practices in conventional insurance breach Shariah law. The current Takaful
Practise uses a combination of two types of main ‘Aqad (contracts). These are
the contract of Tabarru’ (Donation) and contract of Wakalah (Agency) which are
free from the elements of (Riba) usury, wager or Maisir (gambling) and Gharar
(uncertainty). The Takaful system stresses the spirit of co-operation and joint
responsibility among participants.