{"id":5365,"date":"2020-04-29T23:52:44","date_gmt":"2020-04-29T23:52:44","guid":{"rendered":"https:\/\/cometinsure.com\/blog\/?p=5365"},"modified":"2020-10-19T12:00:48","modified_gmt":"2020-10-19T12:00:48","slug":"takaful-in-pakistan","status":"publish","type":"post","link":"https:\/\/cometinsure.com\/blog\/takaful-in-pakistan\/","title":{"rendered":"Takaful in Pakistan"},"content":{"rendered":"<div  class=\"tatsu-gh69u13gpp2oo6lm tatsu-section  tatsu-bg-overlay   tatsu-clearfix\" data-title=\"\"  data-headerscheme=\"background--dark\"><div class='tatsu-section-pad clearfix' data-padding='{\"d\":\"15px 0px 15px 0px\"}' data-padding-top='15px'><div class=\"tatsu-row-wrap  tatsu-wrap tatsu-row-one-col tatsu-row-has-one-cols tatsu-medium-gutter tatsu-reg-cols  tatsu-clearfix tatsu-gh69u13gzrdb1di0\" ><div  class=\"tatsu-row \" ><div  class=\"tatsu-column  tatsu-bg-overlay tatsu-one-col tatsu-column-image-none tatsu-column-effect-none  tatsu-gh69u13h998cq8qm\"  data-parallax-speed=\"0\" style=\"\"><div class=\"tatsu-column-inner \" ><div class=\"tatsu-column-pad-wrap\"><div class=\"tatsu-column-pad\" ><div  class=\"tatsu-module tatsu-text-block-wrap tatsu-gh69u13hhx415lxl  \"><div class=\"tatsu-text-inner tatsu-align-center  clearfix\" ><style>.tatsu-gh69u13hhx415lxl.tatsu-text-block-wrap .tatsu-text-inner{width: 100%;text-align: left;color: rgba(0,0,0,1) ;}.tatsu-gh69u13hhx415lxl .tatsu-text-inner *{color: rgba(0,0,0,1) ;}<\/style>\n<p><span style=\"font-weight: 400;\">Takaful is a Shariah-Compliant Insurance system, an alternative to conventional insurance where all the participants contribute some amount in a pool and share the possible risks according to rules of cooperation, mutual understanding, and contribution. In this system, as per the foreground rules of mutual understanding, trust &amp; cooperation, all participants safeguard each other against potential financial risks.<\/span><\/p>\n<h1><span style=\"font-weight: 400;\">Origin\u00a0<\/span><\/h1>\n<p><span style=\"font-weight: 400;\">Originating from the Arabic word \u201cKafalah,\u201d Takaful means \u201cTo Guarantee.\u201d Through further articulation, it changed to \u201cTakaful,\u201d meaning \u201cjointly guarantee each other.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Takaful is not a newly invented system. Civilizations implemented this practice of mutual understanding and cooperation in 622 AD for the first time. Hence, the significance and purpose of Takaful are elaborated clearly in the Holy Quran and Hadith.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Allah SWT says in the Holy Quran, <\/span><b>Chapter: Al-Hijrat, Verse # 10<\/b><\/p>\n<p><b>&#8211;<\/b><\/p>\n<p><i><span style=\"font-weight: 400;\">\u201cMuslims are brothers to each other.\u201d<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">Islam, as a way of life, preaches its followers to always understand and help each other in difficult times. This exact idea was the ground that laid the foundation of Takaful based on the principles of mutual trust, cooperation, and contribution.\u00a0<\/span><\/p>\n<h1><span style=\"font-weight: 400;\">What is Takaful: The History\u00a0<\/span><\/h1>\n<p><span style=\"font-weight: 400;\">The concept of Takaful existed even before the existence of our religion. Different tribes used to follow a system where they\u2019d create a joint pool to help and cooperate in different ways. When Islam flourished, it also continued this system of mutual trust &amp; cooperation, which is evident from Meesaq-e-Madina.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Afterwards, different caliphs made such agreements, which were not entirely labeled as Takaful, but the very concept existed in them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Later due to Risk Management, the idea of cooperation got commercialized, and conventional insurance came into existence. This transformed a merely kind gesture of support into a proper business. However, the majority of the Muslims declared this type of conventional insurance as Non-Shariah Compliant and abstained from it. To help the Muslim world benefit from Insurance, Muslim Scholars in 1970, began to research on its Islamic alternative.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In 1979, the first Shariah-Compliant Insurance Company founded in Sudan &amp; Bahrain that provided Muslims with Takaful benefits.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Today, approximately 84+ Takaful Companies exist in more than 25 nations in the world.<\/span><\/p>\n<h1><span style=\"font-weight: 400;\">The Concept Model of Takaful\u00a0<\/span><\/h1>\n<p><span style=\"font-weight: 400;\">The typical model is based on the foundation of a Management Company called \u201cTakaful Company,\u201d based on the following principles.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The company creates a simple Waqf Pool where people make contributions and become its member to avail Takaful facilities. The rules of contributions are settled beforehand, and the pool then covers up for the urgent needs and financial losses of its members while they continue to contribute to the pool. The rules &amp; regulations of the Waqf are set following the boundaries of Shariah and other regulatory laws.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The management company is not the owner of the pool. It functions only as an operator or facilitator of the pool running the operations while keeping the accounts intact. The company, however, charges a Wakalah fee (Management Fee) for providing all the services to the members.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Companies make monetary investments in the pool on the basis of \u201cWakalah\u201d or \u201cMudaraba,\u201d in which the company acts as an Investment Manager called \u201cMudharib,\u201d and the pool is treated as \u201cRab-ul-mal.\u201d\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The total sum of the pool keeps increasing with the number of members participating in the pool, which generates profits for everyone. After deducting expenses, setting off claims among the members, and distributing the profit share of the Management Company (Takaful Operator), the remaining amount in the pool (the surplus amount) can be kept by the company as contingency reserves. This amount is used to do some charity or distribute equally amongst the participants of the pool.<\/span><\/li>\n<\/ul>\n<h1><span style=\"font-weight: 400;\">Principles of a Takaful Company\u00a0<\/span><\/h1>\n<p><span style=\"font-weight: 400;\">To conclude, the following are the basic principles of a Takaful Company:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Participants become members of the pool by making contributions.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Pool releases the funds as per Shariah rules and regulations.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Surplus funds can be shared amongst participants.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">These three principles are interlinked, and formal rules and regulations are applied to them to make the whole thing beneficial for every participant.\u00a0<\/span><\/p>\n<\/div><\/div><\/div><\/div><div class = \"tatsu-column-bg-image-wrap\"><div class = \"tatsu-column-bg-image tatsu-bg-lazyload\" data-src = \"\"><\/div><\/div><div class=\"tatsu-overlay tatsu-column-overlay tatsu-animate-none\" ><\/div><\/div><style>.tatsu-row > .tatsu-gh69u13h998cq8qm.tatsu-column{width: 100%;}.tatsu-gh69u13h998cq8qm.tatsu-column > .tatsu-column-inner > .tatsu-column-overlay{mix-blend-mode: normal;}.tatsu-gh69u13h998cq8qm > .tatsu-column-inner > .tatsu-top-divider{z-index: 9999;}.tatsu-gh69u13h998cq8qm > .tatsu-column-inner > .tatsu-bottom-divider{z-index: 9999;}.tatsu-gh69u13h998cq8qm > .tatsu-column-inner > .tatsu-left-divider{z-index: 9999;}.tatsu-gh69u13h998cq8qm > .tatsu-column-inner > .tatsu-right-divider{z-index: 9999;}<\/style><\/div><\/div><\/div><\/div><div class=\"tatsu-section-background-wrap\"><div class = \"tatsu-section-background tatsu-bg-lazyload\" data-src = \"\"><\/div><\/div><div class=\"tatsu-overlay tatsu-section-overlay\"><\/div><style>.tatsu-gh69u13gpp2oo6lm .tatsu-section-pad{padding: 15px 0px 15px 0px;}.tatsu-gh69u13gpp2oo6lm > .tatsu-bottom-divider{z-index: 9999;}.tatsu-gh69u13gpp2oo6lm > .tatsu-top-divider{z-index: 9999;}.tatsu-gh69u13gpp2oo6lm .tatsu-section-overlay{mix-blend-mode: normal;}<\/style><\/div>\n","protected":false},"excerpt":{"rendered":"<div><a href=\"https:\/\/cometinsure.com\/blog\/takaful-in-pakistan\/\" class=\"exp-read-more exp-read-more-underlined\">Read More<\/a><\/div>\n","protected":false},"author":4,"featured_media":5661,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[33,34,30,32,31],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Takaful in Pakistan | Cometinsure<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" 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