Takaful (Arabic: التكافل, sometimes translated as "solidarity" or mutual guarantee)[1] is a co-operative system of reimbursement or repayment in case of loss, organized as an Islamic or sharia-compliant alternative to conventional insurance, which contains riba (usury) and gharar (excessive uncertainty).
[4] The movement has been praised as providing "superior alternatives" to insurance that "reinvigorate human capital, emphasize personal dignity, community self-help, and economic self-development";[5] but also criticized as having "dwindled" in scope to an industry of "conventional insurance with Arabic terminology and language of contract".
[6] Theoretically, takaful is perceived as cooperative or mutual insurance, where members contribute a certain sum of money to a common pool.
[9] Islamic scholars began forbidding commercial insurance as early as the late nineteenth century CE.
[10] The majority of Islamic scholars believe commercial insurance is disallowed for Muslims because it contains They have two main concerns about conventional insurance: According to Jamal Zarabozo, the majority of modern Muslim such as scholars from Islamic Fiqh Council of the Organisation of Islamic Cooperation, the Board of the Leading Scholars of Saudi Arabia, the Fiqh Council of Mecca under the auspices of Muslim World League, Siddiq ad-Dharir, Wahbah al-Zuhayli, Muhammad Mustafa as-Sinqithi, Salaah al-Saawi, Abdullah al-Muslih, Sulaiman Thunayaan, Ali Abu al-Basl, Abdur Rawf al-Shaadhili, Faisal Maulawi, Mohammad Muslehuddin, Afzalur Rahman, and numerous other respected scholars and jurists agreed that commercial insurance were forbidden.
The gamblers play a game of chance for entertainment and profit in which they can win or lose, based on a conscious decision.
Some examples are: Basis of Co-operation: Help one another in al-Birr and in al-Taqwa (both: virtue, righteousness and piety), but do not help one another in sin and transgression.
[27] According to Ali Ahmad Salih, professor of Middle East University in Jordan, this fundraising Takaful business of Zubayr ibn al-Awwam were centered in Medina with its branches spread in Alexandria, Kufa and Basra.
Zafarul Islam theorized in his Academic journal released by Aligarh Muslim University, that the deposit center were named after Zubayr ibn al-Awwam.
[citation needed][41] In order to eliminate the element of uncertainty in the takaful contract, the concept of tabarru' ("to donate, contribute, or give away") is incorporated.
The sharing of profit (or surplus) that may emerge from the operations of a takaful is made only after the obligation of assisting the fellow participants has been fulfilled.
The "TO (takaful operator) makes all the crucial decisions, such as rate of premium, risk strategy, asset management and allocation of surpluses and profits".
Islamic economist Mohammad Najatuallah Siddiqui writes that: "The form of organization chosen to take advantage of the law of large numbers does not change the reality.
We can make insurance a not-for-profit activity (provided we can ensure efficient management), but it does not change the essential nature of what is being done.
[45][self-published source] Additionally, there has been doubt cast on the legitimacy of claiming that takaful participants are making "donations".