Takaful: its importance in Islam

Takaful is the Muslim form of insurance and is based on the mudaraba mode of financing. It is a system of cooperation based on the pooling of common resources to help those in need. Takaful provides security against risk and possible losses in the future. It also assists individuals in developing financial responsibility and providing for their families. Based on the Islamic principle of social co-operation, takaful is an integral part of the Islamic financial system, but is often overshadowed by Islamic banking. There is still not enough published information available on takaful and more research is needed to accomplish its full potential.