Operational Models of Takaful
What Are Takaful Operational Models? Takaful operates through structured models designed to ensure compliance with Sharī’ah principles while meeting the financial protection needs of participants. These models emphasize risk-sharing, ethical investments, and transparency. The Main Takaful Operational Models Wakālah Model (Agency): In this model, the Takaful operator acts as an agent ( wakil ) on behalf of the participants. The operator charges a fixed fee for managing the fund. Any surplus in the fund is distributed back to the participants or retained for future use. Muḍārabah Model (Profit Sharing): This is a partnership model where participants provide the funds, and the Takaful operator manages them. Profits from investments are shared between the operator and participants based on a pre-agreed ratio. Hybrid Model: Combines elements of both Wakālah and Muḍārabah. Popular for balancing the operator’s role as a fund manager and a partner in profit-sharing. ...