QUIZ FAR 618 (Hakem).docx - QUIZ FAR 618(Takaful Question 1 i Concept of insurance in Islam Insurance is based on the concept of a risk transfer

QUIZ FAR 618 (Hakem).docx - QUIZ FAR 618(Takaful Question 1...

This preview shows page 1 - 2 out of 2 pages.

QUIZ FAR 618 (Takaful) Question 1 i. Concept of insurance in Islam Insurance is based on the concept of a risk transfer mechanism in accordance with the principles of the exchange contract (buying and selling) whereby insurance buyer (insured) shall transfer its risk exposure to another party (insurer). The insurer will be paying a fee for the service provided. Islamic scholars do not agree on the contractual character of buying and selling transactions of insurance that do not adhere to the Sharia principles-elements of gambling, riba and gharar. Insurance in Islam is takaful. Insurance in takaful is rife with uncertainties which may cause injustice. Insurer's liability depends on a loss that may or may not occur. If contingent loss occurs, the insured will be compensated for the insurance policy purchased with a small upfront premium, but the insurer will have to pay much greater compensation than a small premium. Takaful is the same as conventional
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read both pages?

  • Summer '18
  • PIF, concept of insurance

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes