INTRODUCTION
Over the last few decades, many of the Faithful have been trying to restructure their lives on the basis of Islamic principles; striving for the revival of Islamic identity and to organize their lives in accordance with Islamic teachings. It is interesting to note that there is a worldwide recognition that present Banking and Insurance practices have led several businesses and consequently economies to either negative growth or outright insolvency due to high interest rates.Therefore more and more people are looking for alternatives and in conclusion opine an INTEREST FREE ECONOMIC SYSTEM is a VIABLE ALTERNATIVE.
As a matter of fact, the speed with which Islamic Banks and Insurance (Takaful) have sprung up and the rate at which they are spreading makes it worthwhile studying this phenomenon systematically.
WHAT IS TAKAFUL?
Takaful (Islamic Insurance) is a policy of mutual co-operation, solidarity, common interest, shared responsibility, joint indemnity and brotherhood against unpredicted risk or catastrophes, in which the participants involved are expected to contribute genuinely.CONCEPTUAL FRAMEWORK
The concept of Takaful is acceptable in Islam and fundamentally different from conventional insurance with the following principles: Policyholders cooperate among themselves for their common good.Every policyholder pays his contribution to help those that need assistance.
Losses are divided and liabilities spread according to the community pooling system.
Uncertainty is eliminated in respect of contribution and compensation.
It does not derive advantage at the cost of others.
Takaful is the form of Insurance deemed permissible for Muslims under Sharia Law. The fundamental philosophy of Takaful is the same as that of the Cooperative, with added restrictions on investments and more flexibility on Capital formation.
Takaful is operated as an enterprise providing services on a self sustaining model rather than as a Charity.
The Takaful Company is an Administrator of the pool and manages the funds on behalf of owners called participants or policyholders.
All participants therefore retain the risks insured, and effectively come together to bear the loss of one party or the other.
SOURCES of LAW affecting TAKAFUL
Our belief as Muslims is that in this world everything happens according to the will of Allah. Therefore, any accident or misfortune that befalls us is by the will of Allah.This belief, however, should not be construed to mean that people should not plan or do whatever they can to take care of responsibilities and provide for their needs. "Leaving it to Allah" as some may say, does not mean we should not be prepared. We do not know the future but we should plan for it
What is extremely important for us to know is that whatever planning and preparation we do has to be done according to Shariah. Shariah has taught that while we should accept whatever "misfortunes" befall us we are also required to avoid or reduce the possibility and /or the effects of these "misfortunes" by taking positive steps.
In many actions of the Prophet (SAW) one can see that whenever possible he took necessary steps to reduce risks although he could have done otherwise if he wanted to.
OPERATING PRINCIPLES
Fiqh Council of World Muslim League (1398/1978) resolution and Fiqh Council of Organization of Islamic Conference (1405/1985) in Jeddah resolved that "...cooperative insurance (Takaful) is permissible and fully consistent with Sharia principles"
- Al-Mudharabah
- Al-Tabarru
AL-MUDHARABAH
Contributions are made by each participant into the Takaful fund which are invested in line with Sharia and then generate profits.
The profits are then shared between the participants.
AT-TABARRU
"Tabarru" means to donate, to contribute, to give away or Zadakat.Each participant donates part of his contributions to assist other participants who suffer a defined loss
It fulfills the Islamic injunction which says: “Sustain in co-operation among yourselves in righteousness and piety”. (5:2)
SOME OF OUR FAMILY TAKAFUL PRODUCTS
Al-Istidad Plan (Family Takaful Plan)Al-Ilmu Plan (Takaful Educational Plan)
Arafat Plan (Hajj Plan) for Individuals
Al-Nasir Plan (Takaful Pension Plan)
Al-Naatijat Daynu Plan (Family Credit Plan)
Baytu Surur (Takaful Mortgage Protection Plan)
AL-ISTIDAD (A FAMILY TAKAFUL PLAN) PLAN
"Verily, it is better for you to leave your offspring (heirs) wealthy than to leave them poor asking others for help".
"The one who looks after and works for a widow and for a poor person is like a warrior fighting for Allah's cause..."
This Plan is for anyone who wishes to:
- Build a contingency fund for future use;
Be financially prepared in the event of a mishap or disability.- Save money for his dependants should he die prematurely;
ARAFAT (TAKAFUL HAJJ) PLAN
"And proclaim the Pilgrimage among men they will come to thee on foot and (mounted) on every kind of camel, lean on account of journeys through deep and distant mountain highways" Holy Quran, S.xxii. 27 (SURAH AL-HAJJ)
The Arafat Plan is designed to enable every Muslim fulfill the Hajj obligation.Key Features
- Systematic savings for Hajj;
- Attractive returns on investment based on the Islamic concept of
al-Mudharabah;
- Flexible maturity period ranging from 1 to 10 years;
- Financial assistance in the event of untimely death based on the
Islamic principle of al-Tabarru;
- Tax relief on contributions;
- Takaful installments not forfeited in the event of cancellation;
- Part-withdrawal allowed after 2yrs of participating.
NAATIJAT DAYNU (TAKAFUL CREDIT) PLAN
"Whoever removes a worldly hardship from a believer, Allah (SWT) will remove from him one of the hardships of the Day of Judgment".
Prophet Mohammed (PBUH) (Sahih Muslim Hadith No. 59, as narrated by Abu Huraira)
This Plan is designed for anyone with any form of short term loan.
Key Features
-Peace of mind is assured
-Guarantor is relieved of any liability on credit facility
-Dependants will inherit assets and not liabilities
BAYTU SURUR (A HOUSE WITH PEACE) PLAN
He who does not own a house is deprived of privacy?Hadith of the Holy Prophet.
The Baytu Surur Plan is for anyone who has purchased, built or intends to build / purchase a house by means of a mortgage.
Key Features
-Guaranteed payment of outstanding mortgage;
-Guarantor is free of any liability from your loan;
-Peace of mind for the family with a house free of financial burden;
-Tax relief on contributions;
-A simple and transparent plan
CONCLUSION
It can be concluded that TAKAFUL is an effective mechanism for reducing the vulnerability of the poor from the impact of diseases, theft, disability, and other hazards as well as safeguarding and promoting the productive use of savings and credit facilities.Today Muslims have been given the opportunity to practice their own Financial systems via institutions like The Jazz International Bank and The Islamic Capital Market (both in the pipeline) and Takaful as it exists in African Alliance Insurance Company Limited.
We must support the Islamic financial system existing in Nigeria.
We must plan for our childrens’ education, because they are the leaders of tomorrow.
We must plan for our retirement for better future living.
We must plan for Hajj for its divine reward.
It is often said he who fails to plan plans to fail.
We must remember that we shall be asked how we met Islam, how we contributed to it and how we left it.
May Allah give us the hearts to recognize the truth and the will to implement it (Amin).
To be a Participant
Fill out our Family Takaful Plan Proposal Form and return to us for necessary processing (or if you send in your contact details it can be forwarded to you).
Subsequently, a Certificate will be issued to you.
Takaful Payment Receipts will always be issued for each payment made.
For further enquiries and request for Proposal Form(s)
Please Contact:
Ismaeel Ayanlere
Takaful Department
African Alliance Insurance Plc
34, Association Avenue
Ilupeju, Lagos State
Tel: 0802 956 0869; 01 454 7003
Massalam!