In accordance to the Islamic religious law, Takaful encourages the importance of community assistance, mutual support, coordination, and partnership. Like so, Takaful Insurance members and participants contribute funds to guarantee the funders against loss or any form of damages. This mutual fund is known as Takaful Fund. The participants of Takaful Insurance make regular contributions to this fund as an alternative to paying insurance premiums.
Takaful Insurance policies mostly cover health, life, and other general insurance requirements. The claims made by Takaful participants are paid using the pooled fund. The excess in funds, after calculating the anticipated cost of claims, are belonged to the participants. These amounts are shared to them as cash dividends or bonuses, or discounts are given in future contributions to the Takaful fund.
UGIB takes pride to acknowledge this motivation and we are honored to elevate this insurance practice by partnering with highly qualified insurance companies in the UAE that provide Takaful Insurance dispositions that cohere to Islamic religious laws.
Takaful versus Conventional Insurance
Although essentially both Takaful and conventional insurance serves the same purpose of providing coverage, there are major differences between these two. The intent of an individual to contribute to a fund that can potentially help those experiencing the unfortunate situation is the main objective of Takaful. If there is remaining fund due to low claim rates by the insurers under Takaful, it will be distributed to the participants accordingly. On the other hand, a conventional insurance policy is purchased as a personal financial security for an individual, and the insurance company is the risk bearer.