Last week we looked at what makes insurance Takaful. That is, what basic criteria it must meet in order to comply with Shariah law. But what makes it better than conventional insurance to begin with?
The answer becomes more obvious once we acknowledge that, at the heart of Takaful lies an ethical structure that’s universally understood and accepted by anyone whose moral compass points to justice, cooperation and solidarity – regardless of religious belief.
For instance, Shariah law forbids Riba – interest, usury and the exploitation of the poor. It also prohibits Gharar – risk, uncertainty, hazard and deceit. Maysir – the acquisition of wealth by chance, or gambling, is also proscribed. Naturally, you won’t find any of that in Takaful – while conventional insurance sees no problem with any of those concepts.
A quick comparison offers some more hints as to why Takaful is becoming more and more popular:
| Takaful | Conventional |
|---|---|
| Based on mutual cooperation | Based on commercial criteria |
| Free from interest, gambling and uncertainty | Includes interest, gambling, and uncertainty |
| Your donation goes to a central pool of money used to cover claims | Your premium is considered as the company’s own income |
| Any surplus is shared among participants | Any surplus is shared among participants All surpluses belong to the shareholders only |
| Your money is invested in Shariah compliant funds | Investment is not necessarily Shariah compliant |
| Your money is kept separate and cannot be exploited by the shareholders | Your premiums are invested for the shareholders profit |
Remember that since Takaful claims are paid from the community pool, your monthly contributions may be lower and your benefits payout may be higher compared with conventional insurance.
For us at EZTakaful, it’s a no-brainer – we’ll choose the Takaful values of cooperation, mutuality and fairness every time. We bring you simple, affordable, 100% Shariah-compliant plans designed to cover everyone you love.