Definition of the Islamic Insurance (Takaful) Term

The following relevant terms are defined for clarity.

Definition of the Islamic Insurance (Takaful) Term

i. Assurance: It is a conventional insurance policy which shares risk that come with mutual solidarity and guarantee as opposed to the transfer of risk.

ii. Average Clause: It  stipulates  that  a  Takaful  fund  is  only  liable  for  such proportion of the loss as the sum covered bears to total value at risk.

iii. Capacity: It refers to the Takaful operators’ existing assets and structures that can enable them to market the services.

iv. Competences: It refers to the skill and knowledge of Takaful which is required to enable the operators to convince customers to buy the Takaful services.

v. Claims: It is a notification to a Takaful operator that payment of an amount is due under the term of the certificate.

vi. Claims Ratio: It is the ratio of Net Claims incurred to earned contribution.

vii. Contribution: It is the payment of an amount (premium) by a participant to the Takaful protection pool, whether direct or through intermediaries for the purpose of mutual protection and assistance.

viii. Designated Charities: In the event that there is a surplus in the Takaful protection pool after all expenses have been deducted, then that Net surplus will be donated to a designated charity or charities.

ix. Al – Dharurat: This concept is used to provide permission for an action that would be considered Haram under normal circumstances, borne out of the necessity of the situation.

x. Event of Loss: This is an event that gives rise to a loss as defined in the Takaful policy.

xi. Fatwa: Juristic opinion, juridical decision in line with the Muslim faith. 

xii. General Takaful: This is a protection to participant against losses arising out of perils such as accident, fire, flood, liability and burglary.

xiii. Gharar:  This means uncertainty, it is a transaction under Islamic law which is held invalid, preventable and avoidable due to the involvement of the element of uncertainty.

xiv. Group Family Takaful: Islamic insurance on a group of people under a master certificate typically issued to an employer for the benefit of employees or to members of an association.

xv. Hadith: This is a word of the Holy Prophet (SAW), his traditions, the narrative of the sayings and actions or the acts of his companions which have gotten his blessing or approval.

xvi. Hibah: It means a gift

xvii. Halal: Lawful, valid in Islam; one of the five major Shariah categorizations of human acts.

xviii. Haram: Unlawful, forbidden in Islam; one of the five major Shariah categorization of human acts.

xix. Indemnity: It refers to as a restoration to the claimant of a loss by payment, repair or replacement.

xx. Islamic Finance: Financial services that meet the requirement of the Shari’ah or Islamic law.

xxi. Kafalah: This is an agreement to pay the debt of another party who defaults, or to guarantee.

xxii. Maisir: This means Gambling; is one of the fundamental prohibitions in Islamic law and finance. 

xxiii. Mudaraba: It is an investment co-partnership whereby the investor (the Rab’ul Mal)  provides  capital  to  another  party/entrepreneur  (the  Mudarib)  in  order  to undertake a business/investment activity for profit and loss sharing purpose.

xxiv. Qard Hassan: It is an interest-free loan, identified as a means of charity or helping other in need.

xxv. Participant: The insured (muwakkil) is the contributing party to the Takaful policy who is covered through the mutual protection and solidarity of the Takaful policy.

xxvi. Participants Account: This is where the portion of contributions from the participant for the purpose of investment/saving is credited.

xxvii. Participants’ Special Account: This is where the portion of contribution from the participant for the purpose of charity (Tabarru) is credited.

xxviii. Rabbul Mal: This means capital provider/ Takaful operators or companies. xxix.     Rasul mal: This means Takaful contributor/customers who buy the service.

xxx. Riba:  This means usury or interest; is a return of money on money whether is fixed, floating, simple or compounded.

xxxi. Shariah: Islamic common law derived mainly from the noble Qur’an and the Hadith.

xxxii. Sunnah: The saying, the action, the teaching and the approval of the Holy Prophet Muhammad (SAW).

xxxiii. Ta’awun: This means cooperation, that is, cooperation among people.

xxxiv. Tabarru: This means donation, charity, the purpose of which is not commercial. xxxv.     Takaful: This means mutual responsibility, another name for Islamic insurance.

xxxvi. Wakala: This means Agency i.e. a contract between an agent and principal that enables the agent to render services and be paid a fee. Read: Average Car Insurance Rates by Age and Gender

xxxvii. Waqf: This means a charitable donation.

Iklan Atas Artikel

Iklan Tengah Artikel 1

Iklan Tengah Artikel 2

Iklan Bawah Artikel