Home > Insurance vs. Takaful
It is a way of providing compensation for one who has suffered loss resulting from an unforeseen accident. In other words, a method of financial protection.
The key differences between Takaful and Conventional Insurance are:
See the enclosed table 1 for a comparison.
Comparison of Takaful with Conventional Insurance
| Issue | Conventional Insurance | Takaful |
| Org. Principle | Profit for shareholders | Mutual for participants |
| Basis | Risk Transfer | Co-operative risk sharing |
| Laws | Secular/Regulations | Shariah & Prudential regulations |
| Ownership | Shareholders | Participants |
| Mgmt status | Company Management | Operator |
| Form of Contract | Contract of Sale | Cooperative, Wakala or Mudarbah with Tabar’ru (contributions) |
| Investments | Interest based | Sharia compliant, Riba-free |
| Surplus | Shareholders’ account | Participants’ account |
