Accidents often lead to severe consequences, and individuals or small groups are not always capable of bearing the financial burdens resulting from these events. This growing need for protection against such risks prompted the idea of creating insurance companies that adopt the concept of cooperative insurance and implement it based on Islamic principles.
Several Islamic insurance companies have been established in many Islamic countries, and a group of concerned individuals, along with those interested in addressing economic challenges from an Islamic perspective, proposed the idea of establishing an Islamic takaful (cooperative insurance) company in Palestine.
This move was in response to the needs of a large segment of the population who were seeking an Islamic alternative to conventional insurance. Takaful not only addresses their needs but also provides peace of mind and security.
The concept of Islamic insurance, or “Takaful,” is based on the principles of mutual cooperation and shared responsibility. It aligns with Islamic teachings and avoids the use of elements such as interest (Riba) or uncertainty (Gharar), which are prohibited in Islamic finance. By working on the principle of helping one another, individuals contribute to a pool of funds that can be used to cover the losses of any member in need.
To address the economic challenges faced by Palestinians, it became essential to offer a solution that aligns with Islamic values. Several people from the community, along with professionals concerned about finding Islamic solutions to financial problems, took the initiative to establish an Islamic takaful insurance company in Palestine. This company would be based on the principles of cooperation and mutual assistance, offering Palestinians a way to secure insurance coverage that adheres to Islamic law.
These Islamic insurance companies respond to the desires of many Palestinians who seek an Islamic alternative to conventional insurance. They offer protection without violating Islamic principles, addressing the needs of those who are compelled by their circumstances to seek insurance or those who see insurance as a necessary benefit. Islamic takaful provides peace of mind and security, built on a foundation of cooperation and fairness, unlike profit-driven conventional insurance models.
The Islamic takaful model relies on collective participation. The contributors provide capital that helps the company obtain the necessary licenses, and this allows policyholders to borrow from the capital in case of a deficit in subscription payments. This ensures that compensation can be paid to those facing risks without affecting the rights or obligations of the policyholders.
To ensure that the company’s operations are in full compliance with Islamic principles, the board of directors forms a Shariah supervisory board. This board’s role is to ensure that the company’s activities align with Islamic teachings, providing peace of mind to the policyholders that they are participating in a Shariah-compliant scheme.
Islamic takaful insurance in Palestine provides a crucial alternative to conventional insurance by offering a system based on mutual cooperation and Islamic principles. It meets the needs of those seeking protection from financial risks while ensuring their participation is in accordance with Shariah, providing a sense of security and trust.
