THE NATURE OF INSURANCE (TAKAFUL) IN ISLAMIC ECONOMICS

Abstract

In Islamic economics, insurance activity is expressed through the term “takaful.” In Arabic literature, insurance is also referred to by the term “ta'min.” Linguistically, takaful means “mutual guarantee” or “mutual responsibility.” It is based on the principles of mutual assistance (ta‘āwun) and voluntary charitable contribution (tabarru‘). Thus, participants voluntarily unite to help one another, cooperate, and engage in charitable activities.