Ouch! explains the commonly-used terms in Takaful insurance. Check out this list of Takaful jargons to make your next insurance conversation more meaningful!
- Agent: The person who solicits, negotiates, or effects Takaful contracts on behalf of a Takaful operator.
- BancaTakaful: The promotion and distribution of Takaful products through banking institutions.
- Contribution: The monthly payment the Takaful participant makes in exchange for Takaful coverage from specified accidents or misfortunes.
- Darurah: An emergency situation when a Muslim person may disregard aspects of Shariah laws to save their lives or to preserve the Islamic community.
- Expense Ratio: The ratio of total expenses for the year, including commissions, salaries, and the like. It measures how much of a fund’s assets are used for administrative and other operating expenses.
- Family Takaful: Also considered a form of life insurance, this type of Takaful plan is financial protection for the Takaful participant’s family. In the event of an accident or the participant’s death, a Family Takaful plan offers financial security to their named beneficiaries.
- General Takaful: General Takaful plans financially protect the participant against loss and damage of their property, vehicle, and more. The common types of General Takaful include motor Takaful, fire Takaful, and property Takaful plans.
- Hibah: A gift voluntarily donated in return for a loan provided or a benefit obtained.
- Investment-Linked Takaful: A hybrid plan that combines Takaful cover and an investment. Your contribution as a participant will provide Takaful cover (which includes death and disability benefits). In addition, part of the contributions will be invested in Shariah-approved investment funds.
- Maysir: Any activity that involves gambling or making bets, whereby the winner will take the entire bet and the loser will lose his. Maysir is also one of three fundamental prohibitions in Islamic finance.
Reminder: The above glossary does not necessarily bear their legal meanings as they are prepared strictly for the information of readers who are unfamiliar with certain terms and expressions used. For further clarification, speak to your Takaful operator.
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Disclaimer: Please be aware that the information presented within our blog articles and/or by our esteemed brand ambassadors/KOLs is intended solely for the purpose of providing general insights. It should not be construed as legally binding in any manner. While we strive to maintain accuracy and currency, we do not guarantee the completeness, reliability, or suitability of the information shared.
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