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In modern business, one of the ways to reduce the risk of loss due to misfortunes is through insurance. The concept of insurance where resources are pooled to help the needy does not contradict Shariah.
The concept is in line with the principles of
compensation and shared responsibilities among the community. It is not a new concept, in fact it had been
practiced by the Muhajrin of Mecca and the Ansar of Medina following the hijra of the Prophet over 1400 years ago. It is generally accepted by Muslim Jurists that the operation of conventional insurance does not conform to the rules and requirements of Shariah.
Conventional insurance involves the elements of
uncertainty (Al-gharar) in the contract of insurance, gambling (Al-maisir) as the consequences of the presence of uncertainty and interest (Al-riba) in the investment activities of the conventional insurance companies which contravene the rules of Shariah. Takaful is an alternative form of cover which a Muslim can avail himself against the risk of loss due
to misfortunes.
We
receive numerous requests for information about the permissibility, concept and practice of Takaful (Islamic Insurance) and about
organizations engaged in Takaful business.
These requests underline important two facts. Firstly, that there is a rapidly increasing interest in it and secondly, there is an acute shortage of information on various aspects of Takaful.
Moved by these factors, We decided to include a section
on Takaful to fill this important information gap.
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