What is Takaful
Takaful is a community-pooling system in which participants contribute their savings into the common fund to help those who need it the most in times of financial difficulty. A Takaful product assists Participants to share their risk on the basis of cooperation, brotherhood and solidarity for a common good.
The concept of Takaful also exists in cooperative societies and joint-family systems etc. In practice, Takaful can serve as a risk-mitigation tool and an alternative to conventional insurance.
First Takaful Company under the name of The Islamic Insurance Company was established in 1979in Sudan. Then other companies were established in Saudi Arabia, UAE, Bahrain, Malaysia, Indonesia,Singapore and afterwards in Pakistan in 2007 after promulgation of SECP Takaful Rules 2005.
In modern times Takaful has enriched itself with the help of Actuarial Science, Underwriting and Investment and formulated a methodology to make it more practical and feasible.