life insurance islam
The term "Takaful" is derived from the Arabic word "Kafaala" ensure the meaning. Takaful means "guaranteeing each other" and refers to the concept of permissible Islamic insurance or "Halal" insurance.
Takaful is based on the principles of "Ta'awun" (cooperation mutual) and Tabaru'a "(donation) for which a group of people (Takaful participants or policyholders) agree to share the risk of a loss potential either to make a donation, of all or part of its contribution, which is used to compensate the loss suffered by any participant in the system of Takaful.
Unlike conventional insurance where the risk is shifted from the policy to the insurance company, Takaful is a structure in which the risk is shared between all policyholders.
The Islamic term finance refers to financial and commercial activities and transactions that conform to Sharia " (Islamic law). While Islamic finance terms, interest free banking, finance, Sharia, sharia banking, insurance sharia, Islamic banking, and Islamic insurance are relatively new, the underlying principles of Islamic finance date to the times of Holy Prophet Muhammad (peace be upon him). Practices Muslims trade is based on these principles to the days of the Ottoman Empire.
Principles of Islamic finance are derived from the Koran "Ghost" (the sacred book of Muslims), "Hadith (the sayings of Holy Prophet Muhammad, peace be upon him)," Sunna "(the way the Holy Prophet Muhammad took his life) and centuries of scholarly interpretations of these three sources. These standards clearly define what is "halal" (permissible) and what is haram (forbidden) in a financial transaction. Highlights of these rules are:
Sharia prohibits the following:
Islamic Finance emphasis on economic, ethical, moral, social and religious diversity, promoting equality and fairness for the good of society as a whole, whereas the conventional financial system focuses mainly on economic and financial aspects of transactions.
There are many ways irregular Sharia finance that are used to develop Halal financial products. These include "Takaful (insurance)," Musharaka (partnership), "shed" (without vote), "Murabaha" (special type of sale), "Ijara" (lease), "Wakala (agency)," Salaam "(Forward sales)," Istisna'a " (manufacturing or construction contract) and Qardo (a loan – with no benefits). About the Author:
Salaam Insurance is the UK’s first dedicated Islamic Insurance Company that provides Takaful car insurance based on the Shariah principle of Takaful.
Article Source: ArticlesBase.com – Takaful and the Principles of Shariah-compliant Financial Services
