Takaful: Protection For Your Family

Question: Does anyone have enough savings to cover the risks and disasters that might happen to them?

In daily life, one is likely to be exposed to various risks and disasters such as illness, accident, car damage and death. In the event of a such situation, a person will usually use his or her savings to cover the medical costs, the cost of repairing the vehicle and the self-subsistence during which he / she is within the emergency period.

However, to cover all these emergency expenditures, with their own savings is not enough. Imagine what happens if a person was injured and at the same time had a sick child who had to get immediate treatment then the cost could not be fully compensated by only depending on his own savings. The risk of a person getting critical illnesses such as cancer, heart attacks, coma and so on can also happen unexpectedly.

In the meantime, follow-up treatment is also needed for the recovery process after surgery. As a result of this situation, accumulated savings will also become diminished and that is when that person will begin to seek other assistance such as zakat fund and so on. However, the application process will take a long time and through a particular process will make it difficult for someone to earn money immediately. Source of livelihoods can also be affected due to unhealthy constraints that getting worst and will cause someone to be fired. Therefore, proper financial planning needs to be plan earlier in order to cover all these expenses.

Question: What are the alternatives other than savings for disaster preparedness?

Among the requirements and the importance is the need to prepare for any possibility of misfortune by participating in any Takaful plan.Takaful is important to support the life of the deceased heirs so that they do not have to beg and plead from public in the event of death of the head of family.

With Takaful, the selected protection plan can help meet ones future needs such as medical expenses, children’s education fund or any other needs. Takaful is based on Tabarru ‘concept (voluntary giving) where an individual group has agreed among themselves to donate (tabarru’) a certain amount of money to a fund that will be used to assist any individual in the group who suffers from accidents or misfortune. By participating in Takaful, participants not only protect themselves, families and their property, but also practicing welfare and charities as the implementation of Takaful consists of the element of charity.

In Takaful, the implementation of Tabarru’ concept can be understand as a form of sincere donation of one party without expecting a reply or exchanges from another party. This is applied through a part of the participant’s contribution to be included in the Risk Fund that will assist any participant in need of financial assistance in the event of an accident or misfortune. And this is in line with the concept of Takaful which contains principles of cooperation, mutual help and mutual responsibility.

Question: How can takaful help family welfare after the death of the participants?

The role of Takaful is not only helps any unfortunate participant but also to provides assurance guarantees to the family in the event of death.

In fact, most people are concerned about the welfare of family members while they are still alive, but not many are making proper plans for the welfare of the heirs after their death. Many people think that Takaful protection is not important and the any misfortune will not be happen to their families. However, we have seen the effect of this way of thinking as the mass media have shared the hardship of this unlucky family members especially those suffered single mother with many children.

It is more difficult when this family members who has been left with debt without sufficient money and at the same time need to bear extra cost of living. Without having proper plan in managing a property can also lead to problem of managing real estate after death. Tussle can also occur in the property of inherited property because there is no plan to manage the property after death.

In Takaful, there are some additional values which will benefits the participant and family such as the implementation of Hibah and a Will (Wasiat) to ensure this property management goes smoothly. Hibah through Takaful benefit will only be implemented after the death of the property owner where the Hibah recipients will only receive his Hibah portion or Takaful benefit based on agreed percentage. This is easier as the distribution of Takaful benefits does not take long time to be distributed to the beneficiaries.

For example, if a husband wishes to Hibah all or give all his Takaful benefits to his wife, then his wife is entitled to the full amount of his Takaful cover/ benefit. The Takaful benefit that to be nominated to the family members can be determined by using any instrument of Hibah nomination or Wasiat nomination. It is up to the participant to choose either to have a Takaful plan with Hibah contract or the Takaful plan with Wasiat contract. If the Takaful participant participated in the Takaful plan with Hibah element, thus the benefit will be divided according to the percentage of agreed Hibah portion. While for the Takaful plan with Wasiat contract, the benefit will be segregated according to the Will and also related with the Faraid calculation.

Some do not take serious on Hibah nomination and consider it as unimportant. The fact of Hibah nomination is very important as to facilitate Takaful benefits distribution to be more easier rather than nominating a Nominee as a Trustee. The Hibah recipient is a person who is entitled to the Takaful benefit while the Trustee is only a representative of the Takaful Beneficiaries and the benefit amount must be distributed according to Faraid only to eligible beneficiaries. This may lead to a longer time for the benefit to be distributed as the implementation of Faraid is usually more challenging and difficult.

Therefore, the community must be aware and start to equip themselves with financial planning and property management knowledge so that the welfare and family will be safeguarded. Failure to manage both financial and property arrangement property will lead to the domination of rights in the wealth distribution and will seize the rights of others.