Takaful is an Islamic insurance that protects its customers against loss or damages. It is a type of cooperative system, where members contribute money into the pool and are responsible for each other’s safety.

Takaful-branded insurance is based on sharia or Islamic religious law, which explains how individuals are responsible to cooperate and protect one another.

In a takaful system, the members’ contributions to the pool are called “premiums” or “fees.” The contributor gets back money from these premiums if he/she suffers losses. This is done according to Islamic law and understood as fulfilling one’s responsibility towards others in society.

In return, the group gives protection and assistance by taking care of any loss sustained by its member(s). The first pillar requires that people spend their wealth in three ways: on themselves for necessities; on family members including parents, children, spouses etc.