Principles of Risk Management in Takaful
Understanding Risk Management in Takaful Risk is an inherent part of life, and managing it effectively is crucial for financial stability. Takaful offers a Sharī’ah-compliant approach to risk management, emphasizing transparency, mutual cooperation, and ethical practices. Unlike conventional insurance, Takaful ensures that risk-sharing aligns with Islamic principles. Key Principles of Risk Management in Takaful Mutual Responsibility: Participants in a Takaful scheme share risks collectively, ensuring that no single individual bears the burden alone. Transparency: Contracts are free from ambiguity ( Gharār ) and ensure all parties understand their rights and responsibilities. Ethical Investment: Takaful funds are invested in Sharī’ah-compliant avenues, avoiding prohibited activities like gambling ( Maysir ) and interest ( Ribā ). Risk Sharing: Instead of transferring risk to a company, Takaful promotes shared responsibility among participants. How Takaful ...