The Islamic Insurance and Conventional Insurance

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1.0 INTRODUCTION

Islamic insurance, also known as takaful is a product and services that guarantee and give protection toward risk to their consumers according to Islamic principle. TheIslamic insurance and conventional insurance both using the same conceptwhich using concept of guarantee. There were also different in between takaful and conventional where takaful is based on shariah compliant while conventional is based on the principle of risk taking and speculation. Muslim jurists generally accepted that the concept of insurance does not contradict with shariah principle and also was accepted by Islam and the Holy Prophet. According to Islam and insurance, (2007), Islam calls for the protection of certain basic rights which are the right to protect the religion, the right to protect the life, the right to protect dignity or honour, the right to protect the property and the right to protect the mind.

Nowadays, the public more concern about their safety and protection whether for their own self or family. Thus, the consumer must understand the concept before purchasing insurance and choosing the suitable product which give benefit to them. There were many differences between Islamic and conventional insurance and by these differences make the consumer have their own understanding and opinion toward the insurance product. An insurance agent and industry be the main role in making the consumer to be more knowledgeable and understanding of each product of insurance.

TAKAFUL: A BRIEF OVERVIEW

Takafulhas existed since 215 BC and been practiced for over 1400 years. The word of takaful originates from Arabic term which is Kafalah. According to General Tkaful, (2008), it means guaranteeing between each other or joint guarantee betwe...

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Nadiah 'Aqilah, M. A., & Hamid, M. A. (2013).Shariah Compliance of Wakalah Concept in Takaful Operation: A Case Study of A Takaful Operation in Malaysia. Tazkia Islamic Finance and Business Review, 8, 221.

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