Takaful means, mutual protection, and joint guarantee. It is a concept of mutual solidarity and brotherhood along with mutual indemnity in case of loss. Takaful system operates on the principles of;
- Brotherhood
- Mutual Assistance - Taawun
- Donation - Tabarru
The above-named principles are appreciated, approved, and encouraged by Shariah. Takaful is a risk management system that works on the basis of Islamic principles eliminating the elements of interest (Riba). Under Takaful, the risk is shared collectively by a group of participants contributing to a single common pool of funds and agree to jointly guarantee themselves against damage or loss to any one of them as defined in the agreement.
Takaful is operated on the basis of shared responsibility, brotherhood, solidarity, and mutual cooperation. Taawun (Mutual Assistance) is a core element of Takaful and it forms the basis of many Islamic practices.
Takaful from Holy Quran,
"Help each other in righteousness and piety and do not help each other in sin & aggression"
