Al-Kauthar Ejensi

What is the argument of the scholars who said that insurance is permissible (Halal)?

The scholars who are of the opinion that insurance is permissible said that insurance is a modem contract and there is no injunction (nass) regarding it. If there is no injunction, then it is allowed (mubah). They based their argument on the established legal maxim that "The original legal position on any matter is permissibility until there is evidence prohibiting it." This legal maxim is based on the Quran of which some of the related verses are as follows:-

We have subjugated to you all that is in the heavens and the earth (45:13)

These scholars further claimed that insurance is a contract that brings ‘maslahah’ (public interest) to the insured. Without insurance for example, one’s next of kin will suffer a huge burden after his death. The scholars further said that custom (uruf) establishes the practicality of Insurance.

Why conventional insurance is prohibited (Haram)?

The commercial conventional insurance contract is prohibited (haram) according to the Shariah because of the following reasons:

[a] Gharar
‘ Gharar’ is taken from Arabic word which means uncertainty. According to scholars, ‘gharar’ is defined as a contract where the results are not known or hidden or one of the possibilities where the frequent occurrence is the one that is more feared. The conventional insurance contract is a contract of exchange whereby the insured pays the price (premium) and the insurer provides compensation. In a contract of exchange, the ‘gharar’ element that can nullify the validity of the sale is consent. The Quran says which means

" O who you believe, do not eat property amongst you in a false way, except through trade by mutual consent." (An-Nisa’:29)

However, the subject matter in a contract is required in determining consent because it is not logical to say that one gives consent to something that he does not know. There are four types of ‘gharar’ which are clarified by our scholars. These are:

i. Gharar in the outcome
When the contract is made, neither the insurer nor the insured knows the outcome of the contract. The insured does not clearly know whether he will get compensation or not as an exchange to the premium that he has paid. Similarly, the insurer does not know the outcome.

ii. Gharar in the existence
In the conventional insurance contract the insured does not know the existence (quantum) of the compensation since it depends on the outcome that may or may not happen.

iii. Gharar in the results of the exchange
When the contract is made, neither the insurer nor the insured knows the outcome of the exchange. The insured does not know whether they will receive the compensation in exchange for the premium that they pay. Similarly, the insurer does not know how much premium they will receive. Sometimes the insurer receives the premium only once or a few times, but has to indemnify an amount that is not commensurate with the premium.

iv. Gharar in the contract period
According to some scholars, when a contract is deferred, the period must be made known. If not the contract is considered void. The same situation arises in the conventional insurance contract whereby compensation is based on a time frame that is not known.

[b] Maisir
‘ Maisir’ is also taken from Arabic word which means gambling. The conventional insurance contract is equated with gambling where if the peril (risk) occurs, the insurer will lose. On the other hand if the peril does not occur, the insured will lose. Furthermore some scholars argue that the source of the money that is being paid as compensation is not determined.

[c] Riba
‘ Riba’ is taken from Arabic word which means interest. There are many verses that prohibit ‘riba’. What exactly constitutes ‘riba’ has always been a disagreement among scholars. Some scholars are of the opinion that interest whether on principal or late payment is ‘riba’. Other forms of ‘riba’ established by the sunnah of the Prophet is the exchange of ‘ribawi’ elements where there is a difference in time and/or quantity. The ‘ribawi’ elements mentioned by the Prophet are gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt. Rightly or wrongly, by making an analogy, money is similar to gold and silver where it is a medium of exchange. Therefore it is a ‘ribawi’ element and that in the contract of exchange between the insurer and the insured there is difference both in quantity and amount. Furthermore, these scholars argued that conventional insurance companies give out loans from the premiums received and charge interest and no doubt that this is ‘riba’.

What are the differences between Takaful and Conventional Insurance?

Takaful	Conventional Insurance
Based on mutual co-operation and ’Tabarru’	Based solely on commercial factors
Free from ’riba’, ’gharar’ and ’maisir’.	Abundant with ’riba’, ’gharar’, and ’maisir’.
Syariah Advisory Council (SAC).	No Syariah Advisory Council (SAC).
Profit will be shared among operator (company) and participant on Mudharabah basis or Performance Investment Fee.	Interest practice.

What is the beauty of Takaful?

The beauty of this system is that participants can obtain two forms of profit. Firstly, the monetary profits through this protection scheme and secondly, the “profit” in the spiritual sense whereby participants can exercise their religious and social responsibilities through the 'Tabarru’ method which would be handed to those who suffer losses and misfortune. The advantage of this system is that it is not only for the benefit of the Muslim but also for the prosperity of all participants, irrespective of their religious beliefs.

What is Al-Wakalah?

Al-Wakalah is the contract wherein the participant authorizes the operator to conduct the affairs of the fund on his/her behalf. Through this contract, Takaful IKHLAS will charge a management fee from the Ta’awuni Account Pool (TAP) for its duty.

What is the investment fund in Takaful IKHLAS ?

This is the fund to invest the participant’s contribution through Islamic counters, Government Islamic Certificate, Islamic Bonds, Fixed deposits in Islamic Financial institution.

What is the main difference between Personal Investment Account (PIA), Personal Risk Investment Account (PRIA) and General Risk Investment Account (GRIA)?

PIA is a Fund for Family Takaful’s products which consist of protection and investment features but PRIA and GRIA Fund just for General Takaful’s product which consist of protection feature only.

Please describe the Ta'awuni Account Pool.

The Ta’awuni pool comprises by three major funds:

a. Expenses Fund
Expenses Fund is a fund for payment for Management expenses, retakaful and technical reserves. Through al-wakalah concept which applied in Ta’awuni pool, Takaful IKHLAS will charge a management fee from this pool.

b. Risk Fund
Risk Fund is a fund for payment of claims.

c. Special Fund
Special Fund is a special pool to help the company not to be dependent on depends to the retakaful.

What is the procedure of Family Takaful claims?

Faced with a tragedy in life? Are you one of our participants? If yes, we are here to help u. There are various types of claims that we handle and they are:

i Death Claims
ii Immediate Death Expenses
iii Total Permanent Disability (TPD)
iv Hospital Benefit (HB)
vi Waiver of Contribution (WC)
vii Critical Illness
viii Family Income Benefit

How to submit a Family Takaful Claim:

1. A claim must be notified to the Family Takaful Claims Department in writing immediately after the event. Please contact 03-78011323 /1327 to obtain a claim form.
2. Claimant’s statement must be completed and signed by the rightful claimant (s) to whom the benefit is payable in the following manner:-

a) Wasi
The statement must be completed and furnished by the named person in the wasi form.

b) Proposed Hibah
The statement must be completed and furnished by person(s) whom the benefit is to be payable.
For minor cases, the statement must be completed by his parents or legal guardian.

c) Assignee
The statement must be completed and furnished by Assignee(s).

3. Obtain and forward all the necessary documents to support the claim to the Family Takaful Claims Dept.
4. All photocopies of documents to support the claim must be certified as true copy by a Commissioner of Oath or any or any of Family Takaful Claims personnel.
5. All documents required must be furnished by the claimant at the claimant’s expense.

How long is the process for Family Takaful claims?

It takes about 3 weeks.

How is the payment method for Family Takaful claims?

The payment will be made via cheque.

What is E-Covernote?

• IKHLAS Motor provides our participants with immediate issuance of new or renewal of cover note.
• It is also electronically linked to JPJ for road tax disc issuance.

What is the procedure of Motor claims?

You met with an accident and wants to file a claim with us.

Step 1 - Make a police report immediately after the accident
Step 2 - Notify our claims department of the accident and get the claim form to be completed. If the vehicle can be driven, send it to the nearest panel workshop, otherwise kindly call our toll free number 1-800-88-1186 for towing services.
Step 3 - Make sure you submit the supporting documents to enable us to expedite your claim.
Step 4 - Authorization for repairs would be issued to the workshop within 24 hours upon receipt of estimate of repairs or adjustor’s report

Can the participant send his vehicle to any workshop of his choice?

Yes, but the repairer must be our panel workshop or he/she can go to the Franchise repairer. If panel repairer please refer to the list of our panel workshop.

How long is the surrender process?

Upon receiving the completed documents, it will take about 14 working days.

When is the effective date of surrender?

The date we receive the application for surrender letter.

I want to change my payment type from AutoDebit to BIRO. What are the documents that I have to submit for AutoDebit/Credit Card/FPX and BIRO application?

The requirements to change the method of collection from Auto Debit to BPA are as follows:

a. Request for Change form (optional)

b. Full set of BPA forms (mandatory)
i. BPA 1/79 forms
ii. Copy of I/C (payor who works at government)
iii. Latest salary slip
iv. ‘Had kelayakan Caruman’

I want to change my Credit Card/AutoDebit number. What should I do?

You need to submit:

a. Request for Change Form
b. Fill in the new Auto Debit/Credit Card form

My Credit Card has expired. What should I do?

You need to update the latest expiry date through written notice.

How long does the AutoDebit/Credit Card/FPX and BIRO starts?

a. AD MBB/BSN – 2 weeks from enrollment date
b. Credit Card-1 day from enrollment date
c. BPA-2 months from submission date to BPA
d. FPX-45 days from submission to BIMB

Can I change my policy term?

Based on company guideline, the change is not allowed. The reasons are once changes happened, it will affect the entire premium and PIA/PRIA or either premium will be increased/decreased and it will start from the certificate entry age.

How can my policy be lapsed even when there are continuous deductions done from my Credit Card/Auto Debit/BIRO/SI every month? Has the money been transferred from my old policy to the new policy?

The possibilities may come from:

a. Deduction start late about 2-3 months after policy in-force.
b. Received payment but no reference (policy) number or wrong reference number for SI/Maybank2U/bank in at bank counter such as Maybank, BSN and etc. Therefore the payment was not keyed in and policy will overdue and will become lapsed.

Can I have more than one policy?

Yes, you can.

Status of policy issuance: When is it issued and when can it be delivered?

a. Standard cases/without error:10 days
b. With error: more than 10days

How do I renew my car insurance? Can I renew it online? What is E-Ikhlas?

You may browse our website at www.takaful-ikhlas.com.my and find the E-Ikhlas portal. There is full information on the page before you can proceed to issue the Cover note by following the step by step instructions.

Is E-Ikhlas applicable for motorcycles as well?

No, for the time being it is applicable only for Motor-Private Cars under comprehensive coverage only.

What is the benefit of E-Ikhlas?

1) You may renew your car insurance from the convenience of your home/office, without going to the counter.
2) You may also earn yourself Real Rewards points. For every RM1, you will enjoy 1 Real point (up to 800 Real points).

How do I know that my Real Rewards points are updated in my account?

The points will be updated directly into your account by Real Rewards within a month.