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“Takaful and Insurance”
A comparative study

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Dr.Aziz-ur-Rehman safee
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Comparative study of Takaful and insurance
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M.Arsalan Tahir & Hatim jabbar

This study attempts to differentiate concepts and operations to execute the conventional insurance and Takaful. Management, financing, ownership and accounting system creates difference between both apparatus.

Conventional insurance based on Riba (interest), Gharrar (uncertainty) and Maisir (Gambling), which are prohibited in Islam. Unlike Insurance, Tabbarro (voluntarily) and Ta’wan (mutual assistance) are cornerstone of Takaful fund. Rich literature in study, collected from secondary source, describe the differences discussed above.

Miss haps, disasters, damages and risks are inevitable in Human life, but manageable. To manage risks, damages through fire, floods, accidents, and Business, Man has find out ways to protect him from these challenges. Conventional insurance and Takaful are the ways to protect lose, but both have major differences in concepts and operations.

Insurance definition According to Pfeiffer (1956) defines as “insurance is a device for the reduction of risk of one party, called the insured, through the transfer of particular risks to another party, called the insurer, who offers a restoration, at least in part, of economic losses suffered by the insured.

Takaful, is drive from Arabic word “Khlafa” mean mutual guarantee, Islamic alternative to insurance promotes the concept of social solidarity, cooperation and mutual indemnification of losses of members. It is a pact among a group of members who agree to jointly indemnify the loss or damage that may inflict upon any of them out of the funds they…...

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