*Halal Insurance (Takaful) –
*What is Halal Insurance (Takaful)?*
Halal insurance is known as *Takaful*, an Islamic alternative to conventional insurance. It is based on the principles of *mutual cooperation*, *shared responsibility*, and *solidarity*, and it avoids elements forbidden in Islam such as *riba (interest)*, *gharar (excessive uncertainty)*, and *maysir (gambling).*
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*How Takaful Works:*
1. *Participants (Policyholders):*
Contribute money into a *shared pool*.
2. *Risk Sharing:*
If any member suffers a loss, *compensation is paid* from the pool — not by a profit-seeking company.
3. *No Interest or Speculation:*
Investments are made in *Shariah-compliant businesses* only.
4. *Surplus Sharing:*
Any leftover amount in the pool may be *distributed back* to the participants — not kept as company profit.
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*Key Principles of Halal Insurance:*
- *Tabarru (Voluntary Contribution):*
Donations from members for the benefit of others in need.
- *Mutual Cooperation (Ta’awun):*
Helping one another in times of loss.
- *Transparency & Ethics:*
Operations are fully transparent and follow *Islamic business ethics*.
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*Why Conventional Insurance is Not Halal:*
- Involves *riba (interest)*.
- - High levels of *gharar (uncertainty)* in contracts.
- Elements of *maysir (gambling)*.
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*Conclusion:*
Takaful is a *Shariah-compliant*, ethical, and cooperative model of insurance that promotes fairness, social welfare, and religious integrity.