Abstract
This chapter has focused on the concept of takaful. Takaful practices existed in the Arab world before the era of Islam, and they were not objected in Islam. The recent practice of takaful emerged in 1979, and there are now more than 300 takaful operators across the globe. Takaful is a contract of tabarru, while conventional insurance is a sale and purchase transaction. The objections to riba al Hadith, maysir and gharar are valid when a contract is commutative, as it is in conventional insurance. However, they are invalid when a contract is non-commutative and is based on tabarru. Therefore, the objections of riba al Hadith, gharar and maysir do not exist in relation to takaful.
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Notes
- 1.
W.J. Kwon, ‘Islamic principle and takaful insurance: re-evaluation’, Journal of Insurance Regulation, 26/1(2007), p. 53.
- 2.
Takaful Act 1984, Laws of Malaysia Act 312, retrieved 27 October 2016 from www.bnm.gov.my/documents/act/en_takaful_act.pdf.
- 3.
M.I.A. Usmani, Meezan Bank’s guide to Islamic banking, p. XX.
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Malik, A., Ullah, K. (2019). Takaful and Its Shariah Compliance. In: Introduction to Takaful. Palgrave Pivot, Singapore. https://doi.org/10.1007/978-981-32-9016-7_3
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DOI: https://doi.org/10.1007/978-981-32-9016-7_3
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Publisher Name: Palgrave Pivot, Singapore
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Online ISBN: 978-981-32-9016-7
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