The Participants (policyholders) of Takaful each pay a Takaful Contribution (premium), based on their individual risk and the likelihood of making a claim, to create a Takaful Fund. The nature of the risk covered, and the period of cover, is specified in the Takaful Contract (insurance policy).

The Takaful Fund is invested strictly in Halal activities under non-interest bearing conditions in order to maximise the fund value. All Takaful Contracts are managed by an appointed agent, who provides all the necessary marketing, operational facilities and administration required to service the Takaful Fund and the Takaful Contracts.

The appointed agent is paid a fee called a Wakala Fee for the services provided to the Takaful Fund and its Participants. If it is ascertained that the Takaful Fund is over-funded, the amount by which the Takaful Fund is over-funded will be distributed to eligible Takaful Participants by way of a Participation Discount (in addition to any No Claim Discount) from their next year’s Takaful Contribution.

To find out more about Takaful insurance visit the Salaam Halal insurance

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