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'Takaful' transformation in digital era
Takaful is one of life’s necessities and probably the least-understood financial product.
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Takaful, a type of Islamic insurance, plays an important part in wealth planning. (Shutterstock/File)
T
em>Takaful, a type of Islamic insurance, plays an important part in wealth planning. This is especially true in the context of wealth preservation and wealth distribution as it creates an instant estate with a small premium.
Takaful is one of life’s necessities and probably the least-understood financial product. Insurance and takaful reimburses people for insured/covered losses in the event of an incident such as an illness, accident or death.
At the same time, it can provide investment capital, lend money and help to reduce anxiety for individuals and society at large. A takaful contract is different from an insurance contract in that there is an inherent element of unilateralism whereby participants “donate” to a takaful fund based on tabarru (donation) principles.
Total global takaful contributions were estimated at US$14.9 billion in 2015, representing a double digit growth rate of 14 percent in 2015. In Indonesia, the total takaful contribution reached a total of Rp 10.23 trillion (about $757 million) in the same period.
