CHAPTER 10Takaful
BACKGROUND OF TAKAFUL
Takaful is the Islamic alternative to conventional insurance and is a major part of the current Islamic finance industry. The word Takaful is derived from the Arabic word ‘Kafalah’, which means joint guarantee or guaranteeing each other. The earliest origin of insurance in Islam can be seen in the practice of Aquila, by Muslims in Makkah and Medina, and was approved by the Prophet. In this system, if anyone was killed by someone from another tribe, blood money was paid to the victim's family by the killer's tribe, who pooled together the required amount. Blood money is the compensation paid to the family of anyone killed, and is the responsibility of the killer or their family or tribe. The original objective of Aquila was to ensure that the victim's family did not suffer loss of income from the death of the earner. Some Arab Muslim countries ...