Takaful Vs ConventionalInsurance | Takaful Pakistan Limited | Shariah Insurance Pakistan
  • CONVENTIONAL INSURANCE

    • 1

      It is a Risk Transfer mechanism whereby risk is transferred from the policy holder (the Insured) to the Insurance Company (the Insurer) in consideration of 'insurance premium' paid by the Insured.
    • 2

      It contains the element of uncertainty i.e. "gharrar" which is forbidden in Islam. There is an uncertainty as to when any loss would occur and how much compensation would be payable.
    • 3

      It contains an element of gambling i.e. "maisir" in that the insured pays an amount (premium) in the expectation of gain (compensation/payment against claim). If the anticipated loss (claim) does not occur, the insured loses the amount paid as premium. If the loss does occur, the insurer loses a far larger amount than collected as premium and the insured gains by the same.
    • 4

      Funds are mostly invested in fixed interest bearing instruments like bonds, TFCs, securities, etc. Hence these contain the element of "riba" (usury) which is forbidden in Islam.
    • 5

      Surplus or profit belongs to the Shareholders. The insured is covered during the policy period but is not entitled to any return at the end of such period.