TAKAFUL IN ISLAM

The following article is an extract from "Socio Benefits Of Takaful / Islamic Insurance Al - Nahdah,19, No.2, December 1995, 43-44,Kulliyyah of Laws, International Islamic University Malaysia;By Dr. Norhashimah Mohd Yasin"

Takaful derives from the Arabic root word ‘Kafalah’ which means to jointly guarantee among themselves, against loss or damage that may be inflicted upon any of them as defined in the pact. Should any member or participant suffer a catastrophe or loss, he/she would receive a certain sum of money or Financial benefit from a fund in order to help him/her reduce the difficulties. Section 2 of Malaysian Takaful Act 1984 defines Takaful as “a scheme based on brotherhood, solidarity and mutual assistance which provides for mutual financial aid and assistance to the participants in case of need whereby the participants mutually agree to contribute for that purpose”. In short, it refers to a group of people, pooling their efforts to support the most needy among them. It is similar to the very concept of insurance i.e. the fortunate many helps the unfortunate few. It refers to the very concept of mutual help and mutual benefit - everyone is expected to help everyone else in virtue and good deeds. This social cooperation stems from the religious duty by virtue of a celebrated Quranic teaching and the practice of the Holy Prophet (saw)1:
“……….help ye one/mother in righteousness and piety but help ye not one another in sin and rancour” (5:2)

“The relationship between the believer to another believer is just like a body, if one part suffers from illness, the other will equally feel the same”(Hadith narrated by Al- Bukhari and Muslim)
From the above, the fellow participants undertake to contribute some money to the fund in view of any calamity or disaster which will certainly create pain and suffering for the victim and the family. The money can channeled to the unfortunate in order to minimize or reduce the risk one will have in life.

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