Diversification of Islamic Financial Instruments
100
Personal and Family Takaful Products
Personal Takaful coverage can be acquired for death, injury, permanent and temporary
disability, and dread diseases, such as cancer, kidney failure, stroke, and coronary thrombosis.
Benefits paid in event of death are subject to the distribution in accordance with Shariah
inheritance law. However, personal insurance is sold only on a group basis, with the members
of the cooperative sharing in the disbursed portion of the annual surplus. A group may be
constituted from duly organized individuals in a neighbourhood, but usually professional
associations and employees constitute cooperative insurance purchasing groups. Family
insurance is offered for travel, accidents and medical risks coverage. The insurance law also
provides for business interruption insurance and public liability insurance, the latter useful to
contractors and others involved in operations posing coincidental risks to the public at large
(Glomedia web). Although only four operators provide family Takaful, which accounts for just
around 4% of the market volume, are noteworthy initiatives to take this line to the next level.
For example, Ta’awuniya Insurance tied up with universities to provide their professors with
pensions covering against 25 risks, including death, personal accident and
disability. Interestingly, it also provides a “widowhood income benefit” tailored to working
ladies. This is the first such policy in the Muslim world and it has been highly commended by
the Sudanese community (Mena Insurance Club web).
Agriculture Takaful
Abu Elbasher, (n.d) argues that Insurance is of crucial importance to all people, most of all for
agricultural insurance activities, for the following reasons:
 Offer security to farmers by indemnifying losses resulting from insured perils over
which they have no control, such as floods, shortage, shortage of rain, fires, pests and
diseases, etc.
 Constitutes an acceptable guarantee to the banks to offer all required financing and
facilities.
 Encourage the farmer to increase his investments and acquire new technology.
 Creates good conditions for settlement in the Country -side, thereby reducing
emigration to urban centers.
 Enhances national savings and encourages mutual cooperation.
 Mitigates the burden on the national budget with respect to natural hazards.
Shiekan was the first operator to launch agricultural insurance in Sudan in 2002 by covering
the country’s largest irrigated agricultural scheme spreading over 2.2 million feddans*. The
first phase insured a cotton crop in an area of 22,000 feddans for 6,300 farmers. By 2011, the
total insured area reached around 2.4 million feddans for irrigated and rain-fed areas for a
total of 800,402 farmers of various crops (Mena Insurance Club web).
Microtakaful
A Microtakaful product is a Takaful product that is designed to respond to the financial
protection needs of low-income households. In this respect: (a) “financial protection” means
being able to access timely and adequate financial resources to: (i) cope with major expenses;
or (ii) provide temporary or partial relief from financial difficulties arising from unexpected
adverse events; and (b) “low-income households” refers to poor, vulnerable or lower middle-
income households, particularly groups that have been previously excluded from access to
takaful. (Bank Negara Malaysia, 2016).