Takaful is a system of insurance based on the Islamic principles of mutual assistance (ta’awun) and donation (tabarru). Takaful means joint guarantee, whereby a group of participants contribute towards a pool of money and mutually agree to protect each other by compensating those participants who suffer from an insured peril.
Based on mutual cooperation
Commercial relationship between insurance company and insured.
Combination of donation and profit-sharing contract
Shari’ah laws and Government/local laws
Participants’ fund; in case of shortfall access to shareholders’ equity on a qard hasan basis
No restrictions except prudential