DBIF2023 : TAKAFUL

CHAPTER 4
TYPE OF TAKAFUL
Prepared by : Nurul Atiqah Binti Mohd Rahim

Types of Takaful
General Takaful
Family Takaful

Family Takaful

A family takaful plan is a combination of long-term

investment and a mutual financial assistance scheme.

The objective of this plan are as follows:

To encourage saving on a regular basis over a fixed period of

time.
To earn investment returns in accordance with Islamic principles.
To obtain coverage from a mutual aid scheme in the event of
death of the participant prior to maturity of the plan.

The contribution paid by the participant is credited into

two separate account
Participant Special Account (PSA)
Participant Account (PA)

Participant Special Account

PSA based on tabarru and donation concept.

The participants contribution that goes into the

PSA will be used to fulfill the obligation of mutual
help should any of the participants face
misfortune arising from death or permanent
disability.

If the participant survives to the date of maturity

of the takaful plan, he or she will be entitled to
share the net surplus from the fund, if any.

Participant Account

PA is for saving and investment. The

fund in the PA account will be
invested by the takaful operator.

The profit from the investment will be

shared between the participants and
the operator according to a preagreed ratio.

Individual
family
Takaful (individual)
Investment-linked
Group
Family
Takaful

General Takaful

General takaful scheme is essentially for mutual financial assistance on a

short-term basis, usually 12 months.

The scheme is mainly to allow participants to be compensated for any

material loss, destruction or damage to their properties or belongings by
some mishap or misfortune.

Under this concept, all contributions made by the participants are placed in
the general takaful fund on the basis of tabarru or donation.

This is quite different from family takaful where the contributions of the
participants are divided and created into two separate funds, the PSA and
the PA.

If at the end of the takaful period, a net surplus exists in the general takaful
fund, the same shall be shared between the participants and operator on
the basis of mudarabah (profit sharing), provided the participants havenot
made any claim or receive any benefits for the policy.

The Islamic Financial Service Board (IFSB) defines

general takaful as scheme which are basically
contracts of joint guarantee on a short-term basis
(normally one year), providing mutual compensation
in the event of a specified type of loss. The schemes
are designed to meet the needs for protection of
individuals and corporate bodies in relation to
material loss or damage resulting from a catastrophe
or disaster inflicted upon real estate, assets or
belongings of participants. The takaful contribution
paid is pooled into the Participant Risk Fund (PRF)
under the principle of Tabarru to match the risk
elements of the business that are inherent in its
underwriting activities.

General
Home
Takaful

Home Takaful Scheme

Houseowner takaful scheme
It covers the physical house against loss or damage
caused by floods, fires and other perils.

It also protects the garage, walls, gates and fences

around the property as well as permanent fixtures and
fitting

Householder takaful scheme

Householder takaful covers the loss or damage to the
contents of the house.

This will include the furniture, television, jewellery, etc.

Motor Takaful Scheme

Motor takaful scheme covers against loss or

damage to motor vehicles due to accidental
fire, theft or accident.

It also covers bodily injury or death of a third

party as well as loss or damage of a third
partys property.

There are two types of cover for a motor

takaful plan, namely third party and
comprehensive covers.

Third party covercover

Comprehensive

Accident/miscellaneous takaful
scheme

Offered to the retail, services,

manufacturing, communication,
energy, agriculture sector, etc.
Accident
TypePersonal
of accident
cover by Takaful

Personal Accident

Personal accident takaful is an annual plan that

provides the policy holders or their beneficiaries
with compensation in the event of death,
disablement or injuries arising from an accident.

Personal accident takaful can be taken for the

individual or for his family.

It also available for short durations such as when

one is travelling abroad, to cover the policy holder
should any accident occur during the travel
period.

Workmen Compensation Takaful

Workmen compensation takaful is mandated in

most countries to protect those in the
employment of others.

It only pays for accidents and injuries that are

work-related.

All costs related to injuries that occur outside

working hours will not be paid, unless those
costs are related to an accident or injury that
occurred while the employee was on the job.

Workmen compensation takaful provides the

injured employees with medical coverage
and income replacement.

Employers also benefit

workmen compensation
employees.

All costs of health care services provided to

an injured employee will be taken care of by
the workmen compensation takaful policy.

from offering a
policy to their

Benefit of Takaful

Takaful has created products approved by shariah that offer almost

all kinds of risk coverage.

Family takaful scheme, which are long-term in nature, encourage

participants to save regularly over a long period of time.

Under family takaful, there is a wide range of investment avenues

like structured products that offer capital protection when held until
maturity.

Family takaful gives muslim participants peace of mind and spiritual

fulfillment because the are investing in a shariah compliant manner.

In family takaful, if a participant ends the policy midway, he will be

given what is due to him in terms of the total contribution, plus the
profits, if any, earned from the investment of the family
contribution, plus whatever cover the takaful scheme offers.