September 8, 2017
Malaysia’s Takaful industry began more than 3 decades ago and in recent years it has experienced growing interest from people wanting to protect their families. However, many myths about this Islamic insurance concept are still abound. Here are the top 5 misconceptions about Takaful debunked.
Although it is based on Islamic principles, Takaful insurance products are offered to both Muslims and non-Muslims alike. Predating the existence of Islam, the Takaful concept originated from a group of Arabic traders who jointly pooled their money as a hedge for one another against trade voyage risks. The Takaful of today has a similar function as conventional insurance, albeit with Islamic and moral elements built into its structure. Everyone can purchase and benefit from the wide variety of Takaful products available in the market, regardless of their religious beliefs.
The Islamic finance element in Takaful prohibits interest, speculation, gambling or ambiguity in any part of its business activities. Takaful only insures pure risks with the possibility of loss or no loss, and not speculative risks, which incur the possibility of loss, no loss or gain (the element of gambling). Additionally, Takaful only invests in stable Shariah-compliant funds and is more tightly regulated than conventional insurance. As such, it is a safe, stable and efficient form of protection for the masses.
In essence, while they are both similar in terms of giving insurance coverage to policy holders, many conventional insurance companies may focus more on profits. In contrast, the goal of Takaful operators, who are mutual or cooperative entities, is creating a self-sustaining business that takes care of its community’s well-being — rather than maximising profits. All profits are shared in accordance with the contractual ratios between shareholders and policy holders, after deducting the performance fee for the operator. For conventional insurers, the profits belong to the company and shareholders only.
When an accident happens that renders you unable to work, you need to safeguard your savings from being depleted on medical and treatment costs. A Takaful insurance plan is a great way to protect against life’s emergencies. It is also very affordable with plans costing as low as RM10 per month, which gives you and your family cash pay outs in the event of an accident. You can rest assured that your family’s lifestyle would not be disrupted even during tough times.
Thanks to the Internet, you can now compare Takaful plans and buy a policy online according to your needs. The types of plan, eligibility and benefits are clearly spelled out in easy-to-understand terms so you won’t need an agent to decipher them. And if you have any questions, there will usually be a toll free number which you can call for assistance.
With these 5 popular myths debunked, you can clearly see the true facts about Takaful and the immense benefits it has to offer. There is no better time than now to choose the right protection plan for you and your family. Check out the EZTakaful plans here!
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