GROUP CREDIT TAKAFUL

Islamic Insurance;

Ibn Abidin (1784-1836) was the first scholar in the Muslim world to discuss the meaning
and legal character of insurance of insurance has been under discussion since then.
Opinions regarding legitimacy, adoption, and adaptability of insurance are numerous.
Recently, however, a consensus was emerging for adapting insurance in the name of
Takaful and solidarity. As a result, several Islamic Takaful and solidarity companies have
been established since 1979.

Insurance in Pakistan;

Pakistan's life insurance sector, nationalized in 1972, operated under the aegis of the State
Life Insurance Corp. and Postal Life Insurance until 1992, when the government opened
it to private sector participation. Foreign companies are no longer barred from the life
insurance business, but they are restricted to minority ownership. Private companies
function in nonlife insurance areas, but the government insurance business is controlled
by the National Insurance Corp. One of the state's first steps was to standardize and
reduce premium rates and to encourage coverage among a wider segment of the
population. In 2001, there was US$$168 million of life insurance written in Pakistan.

Takaful in Pakistan;

The Takaful market is still in a formative stage and market projections estimate growth
rates between 15% and 20% over the next 10 years, reaching US$7.4 billion in premium
by 2015. With challenges around customer service and productivity, technology can
enable this growing industry through its formative stage.
What Does Takaful Mean?

A type of Islamic insurance, where members contribute money into a pooling system in
order to guarantee each other against loss or damage.Takaful-branded insurance is based
on Shariah, Islamic religious law, and explains how it is the responsibility of individuals
to cooperate and protect each other.

Introduction;

Under Group Credit Takaful each borrower of the Participant is covered for outstanding
balance of financing. The compensation due to the Participant is the scheduled amount
outstanding on the date of death or disability of the borrower.

For whom is the Plan suitable?

This Plan is suitable for banks, financial institutions, and cooperatives which provide
financing facilities for house building, purchase of conveyance, purchase of household
items, or for any other purposes.

What need does it fulfill?

It provides financial security to lending institutions against the risk of untimely death or
disability of their indebted borrower. In most circumstances the deceased family
members are not in position to repay the loans particularly if the deceased person was the
head of family and sole bread winner. Therefore, the Plan provides relief to the creditor
without the hassle of recovery and avoids causing additional hardship to the bereaved
family.

SUPPLEMENTARY BENEFITS (OPTIONAL)

 Accidental Disability Benefits;

Under Accidental Disability if any person covered sustains bodily injuries effected solely
through external, violent and purely accidental means, and within ninety (90) days after
such injuries are incurred, shall suffer losses, compensation will be paid to the Participant
for the benefit of the person covered as per the following schedules:

 Permanent Total Disability;

If a person covered sustains bodily injuries and suffers losses which are ‘permanent and
total’ the following compensation will be paid to the Participant for the benefit of the
covered member:
  Natural Disability Benefit;
Under Natural Disability if any person covered, suffers ‘permanent total disability’ due
to natural causes which renders such person incapable of performing his/her duties and
being gainfully employed otherwise, the full sum covered will be paid to the Participant
for the benefit of the covered member.