Takaful Products are insurance or protection based on the concept of mutual assistance by applying the principles of solidarity, cooperation and responsibility. Participants contribute to the fund as a donation or ‘Tabarru’ which will be used to help each other in times of misfortunes such as death, total permanent disablement and critical illness. The fund is managed by the Takaful Operator.

In order to be Syariah compliant, 3 objectionable elements will have to be removed, namely, uncertainty (Gharar), gambling (Maisir) and usury (Riba). The business operations are monitored by a Syariah Committee to ensure continuing compliance. Claims are paid out from the ‘Tabarru’ fund.

Like conventional insurance, takaful products offer a combination of protection and investments. Riders may be added to enhance the protection. These riders may include hospitalisation benefits, critical illness and waiver of contribution benefits. Certificates of participation in the fund are issued instead of policies.

Not only muslims but non muslims too may participate in the takaful funds. The contributions are also tax deductable up to RM6,000 including personal EPF contributions.