what is takaful 
takaful is a type of islamic insurance wherein members contribute money into a pool system to guarantee each other against loss or damage takaful branded insurance is based on sharia or islamic religious law which explains how individuals are responsible to cooperate and protect one another takaful policies cover health life and general insurance needs takaful insurance companies were introduced as an alternative to those in the commercial insurance industry which are believed to go against islamic restrictions on riba interest al maisir gambling and al gharar uncertainty principles all of which are outlawed in sharia understanding takafulall parties or policyholders in a takaful arrangement agree to guarantee each other and make contributions to a pool or mutual fund instead of paying premiums the pool of collected contributions creates the takaful fund each participant s contribution is based on the type of coverage they require and their personal circumstances a takaful contract specifies the nature of the risk and the length of the coverage similar to that of a conventional insurance policy the takaful fund is managed and administered on behalf of the participants by a takaful operator who charges an agreed upon fee to cover costs much like a conventional insurance company costs include sales and marketing underwriting and claims management any claims made by participants are paid out of the takaful fund and any remaining surpluses after making provisions for the likely cost of future claims and other reserves belong to the participants in the fund not the takaful operator those funds may be distributed to the participants as cash dividends or distributions or via a reduction in future contributions an islamic insurance company operating a takaful fund must operate under the following principles special considerationsaccording to allied market research the global takaful insurance market was valued at 24 85 billion in 2020 and is projected to reach 97 17 billion by 2030 growing at a cagr of 14 6 from 2021 to 2030 2since 60 of the global muslim population is comprised of young muslims less than 25 years of age this demographic can represent a sizeable customer base as their wealth grows over time 3some of the largest names in the takaful market according to a research and markets report were believed to be the following takaful vs conventional insurancemost islamic jurists conclude that conventional insurance is unacceptable in islam because it does not conform with sharia for the following reasons 