Takaful Insurance of Africa Frequently Asked Questions Categorized By Products
Q: What is Family Takaful Individual Plan?
Family Takaful plan is a shariah compliant long term savings, protection and investment plan with a fixed maturity period that also enables members to enjoy mutual financial assistance among themselves and their beneficiaries in cases of death, disability or other forms of illnesses. A Family Takaful plan istherefore a financial program that pools efforts to help the members in times of need due to untimely death of principal members and other mishaps resultingin personal injury or disablement.
What proportion of the takaful installment to be relinquished as tabarru and credited into the participant's special account is determined based on sound actuarial principles. The takaful installment credited into these two accounts will be pooled as a single fund for the purpose of investment activities undertaken by Takaful Insurance of Africa in a manner permitted by the Shariah.
Q: How does a Family Takaful Individual Plan Operate?
A person who participates in any family takaful plan is called a participant. A participant may choose any one of the plans offered by Takaful Insurance of Africa. The family takaful plans have a defined period of participation. Takaful Insurance of Africa and the participant will enter into a long-term takaful contract, which is based on the principle of Al-mudharabah (profit-sharing). The takaful contract spells out clearly the rights and obligations of the parties to the contract. The participant is required to pay regularly the takaful installments in consideration for his participation in the takaful plan. The participant will decide the amount of takaful installments that he wishes to pay, but such an amount shall be subject to the minimum sum as determined by Takaful Insurance of Africa. Each takaful installment paid by the participant shall be divided and credited by Takaful Insurance of Africa into two separate accounts, namely the participant’s account and the participant’s special account. A substantial proportion, for example, such as 93% of this installment is credited into his participant’s account solely for the purpose of his savings and investment. The balance is credited into the participant’s special account as ‘tabarru’ (donation) for the purpose of mutual help. Mutual financial assistance such as takaful death benefits to fellow participants is paid from the participant’s special account.
(a) Facility Guard Policy: Mortgage Protection Policy
(b) Group Family Takaful: Provides benefits similar to what is called Group Life Benefits in Conventional Insurance
(c) Family Education Policy
(d) Group last expense Policy
Q: What are Group Takaful Policies?
Group Takaful policies are designed for groups and teams to safeguard both individual members in the groups and also financial institutions against adverse effects of death or disability of a member.
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Q: Is Afya Takaful only for Muslims?
No.It is open for both Muslims and Non-Muslims.
• More than one female spouse allowed
• It is based on ethics and moral principles
• Surplus sharing
Q:How costly is Afya Takaful as compared to Conventional Medical?
The rates used are competitive.
Q:Does one require medical examination to join Afya Takaful at inception?
No. There is no medical examination required.
Requirements for a Quotation
• Full registered name of the client
• Details of their occupation
• Client to state the level of benefits being sought
• Client to give details of the family sizes i.e. M (Single employees), M+1 (employees with one dependant, etc.)
• Client to provide claims experience
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A Retirement Benefits Scheme is an investment vehicle that will enable an Individual or organization to set aside funds towards their retirement.
Q: What is Takaful Umbrella Fund?
Takaful Umbrella Fund is the first Sharia compliant retirement benefits scheme established in Kenya in line with Islamic principle of commercial transaction to enable members save for their future in an ethical way.
Any organization offering business considered agreeable to Islamic principles and does not have a retirement benefit scheme set up on behalf of their employees.
Q: Why do I need to join Takaful Umbrella Fund?
Takaful Umbrella Fund will enable you save for your retirement prudently, in a cost effective and Sharia compliant manner.
Q: What role does my employer play in my Retirement Benefits Scheme?
Your contributions and your employer’s contributions are availed to an Investment Manager who in collaboration with the Trustee will be responsible to develop a Sharia compliant investment policy and invest the contributions accordingly to enable you earn ethical returns on your contributions.
Q: What happens to my benefits should I die before retirement?
If you die before your retirement age your total benefit will be paid to your nominated beneficiaries.
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Q: How does Takaful Work in Practice?
Takaful works on the basis of an agreement made by the Participants of the Takaful scheme. Each Member agrees that he/she is one of the insured by buying a policy. Each pays a premium to the scheme, which is both used to compensate claims and is also invested in approved instruments. A Takaful company cannot, for example, invest in activities that deal in interest, alcohol, gambling or uncertainty. The profits made from the permitted investments are divided among the participants in the scheme.
Takaful Insurance of Africa (TIA) provides a wide range of General Takaful products:
Motor, Fire, Burglary, Goods in Transit, Professional Indemnity, Money, Marine, Fidelity Guarantee among many others.We provide products designed for both corporate and individuals. Our Micro-Takaful product range are designed and priced to bring innovative products within the reach of individuals and communities in our society.
Q: What are the Main Differences between Takaful & Conventional Insurance?
The act of taking measures against possible dangers or consequences does not go against the teachings of Islam. As described in the Qur'an, Prophet Yusuf (Alaihis Salaam) 'filled the grain silos from the surplus of seven years of good harvest as a protection to ensure the availability of continuous food during the seven lean years.However, Takaful differs from conventional insurance cover;
First, in a conventional insurance scheme, the insured person sells his risk at a price to another party, thus introducing an element of "gharar" (uncertainty) in the contract. Under Shariah, a contract of uncertainty exists when the two parties do not know the nature of the counter-value that they are trading. A house may burn down, costing the insurer a large sum of money, or it may not burn down in which case the insured person has paid a premium and received nothing in return.
Second, conventional Insurers invest in ventures that involve interest or some form of activity, which goes against Shariah principles.
Third, conventional insurance is not mutually beneficial, as certain individuals (shareholders, for example) benefit at the expense of others. In other words, commercial insurance companies exist to serve the interest of shareholders first, not policyholders.
Finally, the guiding principle behind commercial insurance is that it is based largely on commercial factors. Takaful, on the other hand, is guided by the principles of improved welfare for all, which aims to establish a social order based on universal brotherhood.
While the conventional insurance contract is one of transferring of risk from the insured to the insurer for a premium, that is, one of risk trading, the Takaful contract is based on the Islamic principle of Tabarru, that is, a contract of self-insurance, or self-guaranteeing among members of a group.
Q: How is Uncertainty (Gharar) Eliminated from the Takaful Contract?
Uncertainty can never be eliminated. It remains in the Takaful contract as well. However, since the Takaful contract comes under contract of Tabarru (donation), the uncertainty (gharar) is considered to be within tolerable limits under Shariah.Conventional Insurance being a contract of risk exchange contains “excessive gharar” and therefore becomes illegal.
Takaful products are competitively priced, and are relatively cheaper than conventional products, given the additional value offered Takaful products, which cannot be matched by conventional insurance products.
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