Takaful
تكافل
Islamic mutual insurance where members contribute to a shared pool and support each other.
Conventional insurance involves paying premiums to a company that profits from them, with uncertainty about whether you will ever claim. Takaful replaces this with a cooperative: all members contribute to a pool, claims are paid from that pool, and any surplus is returned to members.
Islamic perspective
Takaful is permitted because it removes gharar (the uncertain nature of conventional insurance payouts) and replaces commercial profit with mutual cooperation.
Example
Fatima and 1,000 others each contribute £50/month to a UK Takaful motor pool. When Ahmed (also in the pool) has an accident, his claim is paid from the pool. At year end, any surplus is shared among members.
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