Takaful comes from the Arabic root-word ‘kafala’ which means to guarantee, to help, or to take care of each other’s needs.
Takaful refers to mutual protection and joint guarantee.
Operationally, Takaful refers to participants mutually contributing to the same fund with the purpose of having mutual indemnity in the case of peril or loss.
Policy is a written contract effecting takaful.
A certificate issued by an takaful provider has the same contractual effect and significance as a policy.
All clauses, riders, endorsements, and the proposal form signed by the insured form part of a policy.
Takaful operators are mutual or cooperative entities. The goal of Takaful is community well-being and self-sustaining operations.
Takaful premiums are as competitive as the conventional counter-parts. Hence choosing a Takaful coverage will not necessarily entail a higher premium.
All procedures, including claims, are the same as with conventional insurance companies. It is the nature of the contract that differs, not the procedures.
Takaful companies offer the same varieties of products including Fire, Marine, Motor, etc. Takaful providers also have the expertise to deliver risk-specific solutions based on the client’s requirement.
Claim is a demand made by the insured, or the insured’s beneficiary, for payment of the benefits as provided by the policy.
Orient Takaful provides fair and quick settlement of registered claims.
Insurable Interest is the interest in property such that loss or destruction of the property could cause a financial loss. Insurance interest also exists where an omission or negligence or an accident at one’s place that brings about suffering or damage to a third party that can be assessed in monetary terms. There cannot be insurance without an insurable interest.
Uncertainty can never be eliminated; it remains in the Takaful Contract as well. But, since the Takaful contract comes under Tabarruaat, the uncertainty (gharar) is considered to be within tolerable limits under Shariah.
Insurance, being a contract of exchange (muawadat), contains “excessive gharar” and is termed as fasid.
Employers Liability Insurance is the coverage against common law liability of an employer for accidents to employees, as distinguished from liability imposed by a workmen’s compensation law. Workmen’s Compensation (WC) takaful seeks to cover the employer against his liability towards his employees for any accident or specified illnesses incurred during employment. Orient Takaful can offer both as a single package to provide comprehensive coverage to the employer.
Reinsurance or Retakaful is takaful coverage that a takaful provider buys for its own protection. The risk of loss is spread so a disproportionately large loss under a single policy doesn’t fall on one company. Reinsurance or Retakaful enables a takaful provider to expand its capacity; stabilize its underwriting results; finance its expanding volume; secure catastrophe protection against Acts of God. Orient Takaful has a robust panel of reinsurers led by QBE Re, one of the world’s leading reinsurers.
Insured’s Net Retained Loss is also a deductible but this does not form part of the limit of liability. This is often used in liability takaful.
Risk Management is the Management of the pure risks to which a company might be subject. It involves analyzing all exposures to the possibility of loss and determining how to handle these exposures through practices such as avoiding the risk, retaining the risk, reducing the risk, or transferring the risk, usually by insurance. Orient Takaful provides Risk Management Services to its customers.
Casualty Insurance (Casualty Takaful) is the type of policy that is primarily concerned with losses caused by injuries to persons and legal liability imposed upon the insured for such injury or damage to property of others. It also includes such diverse forms as plate glass, coverage against crime, such as robbery, burglary, forgery, boiler, machinery and construction takaful, and aviation takaful.
Accidental Death Benefit – in a unified motor takaful policy, benefit in addition to the death benefit paid to the beneficiary, should death occur due to an accident. Accidental Benefits can also be extended to cover non-death benefits such as total or partial disability either permanent or temporary. There can be certain exclusions as well as time and age limits.
Deductible is the amount of loss that the insured pays before the insurance kicks in.