Based on the Islamic Muamalat (Islamic transactions), Takaful insurance is a Shariah compliant Insurance. Members under this insurance contribute funds in a pooling system. The funds collected are called Tabarru and such contributors are covered under Takaful. The laws governing this type of insurance brings out the importance of co-operating and protecting fellow individuals.


In Malaysia, Takaful is an alternate to the traditional/commercial insurance companies which are said to violate Islamic restrictions – riba (interest), al-gharar (uncertainty) and al-maisir (gambling).


Depending on what coverage is needed, the amount of contribution is fixed. The contract lays out the time period and the risks involved.


On behalf of the contributors, the funds are managed by a takaful operator who charges a fee to cover costs of management.




  • Medical and health Takaful: This covers medical treatment and hospitalization under a private hospital.
  • Child education Takaful: In case of death or permanent disability of the contributor, their child will be financially protected. Also, this type of policy acts as a long-term savings to cover for higher studies.
  • Family Takaful: The contributor and the beneficiary are provided protection under the policy and backup with long-term savings.
  • Investment linked Takaful: A combination of Family Takaful and Investment is called an Investment linked Takaful. Investments are made only under Shariah approved investment schemes.


  • Home Takaful: Any coverage for the loss or damage of household items is a Householder’s Takaful. Coverage for the loss or damage due to natural disasters like flood, earthquake, fire etc is termed House Owners Takaful.
  • Personal accident Takaful: In the event of death, permanent disability or injuries due to an accident, compensation will be provided.
  • Motor Takaful: Like a commercial insurance policy, motor Takaful comes in 2 products; Third Party and Comprehensive. A Third party Takaful covers you for any loss/damage due to accident, theft or fire. It even covers third party’s damage of property, or death. While a Comprehensive Takaful, protects both the contributor and the third party against the mentioned incidents.


Takaful insurance is not only open to Muslims, but to non-Muslims as well. All Takaful agents are required to register with the MTA (Malaysian Takaful Association). While Takaful differs from commercial insurance companies, fundamentally they help in reducing your financial burden when something untoward happens.


Malaysia has several insurance companies offering a variety of Takaful insurance plans. Visit www.smartgenie.com to compare and get the best price for different policies.


Disclaimer: All information provided in this article/blog, published on this website is strictly for general information purpose only. SmartGenie does not provide any warranty about the authenticity and accuracy of such information. SmartGenie will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Please visit the websites of respective banks/financial institutions for more details about products.

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