• Nafis Alam
  • Lokesh Gupta
  • Bala Shanmugam


Islamic insurance, or takaful, has enjoyed remarkable growth contributing positively and substantially to the world economy. The conventional, or Western, insurance system is viewed by Islam as violating two of its primary tenets i.e. the prohibition against engaging in activities involving gharar, or uncertainty, and maysir, or gambling. In the conventional insurance system, risk of loss or damage is transferred to an insurance company, which makes a profit if its premium and investment income exceeds its incurred losses and underwriting expenses. In a takaful system, participants make payments to a common fund that is managed by a takaful operator under one of three models: mudharabah (profit-sharing), wakalah (an agent who receives a management fee), or wakalah with waqf (a hybrid form of the wakalah model that employs a foundation, or waqf). The takaful operator does not assume the risk of loss or damage on the part of the participants. Rather, the risk is shared among the takaful participants whose contributions provide the means to cover any losses or damages incurred by themselves or others. There are wide range of Family and General takaful products available in the market such as Family Takaful, Investment – Linked Takaful, Medical & health Takaful etc.


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Copyright information

© The Author(s) 2017

Authors and Affiliations

  • Nafis Alam
    • 1
  • Lokesh Gupta
    • 2
  • Bala Shanmugam
    • 3
  1. 1.University of Reading MalaysiaJohor BahruMalaysia
  2. 2.RM ApplicationsKuala LumpurMalaysia
  3. 3.Federation University MalaysiaPetaling JayaMalaysia

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