The Roles and Application of Medical Plan in Prubsn Takaful

UNIVERSITI TEKNOLOGI MARA
THE ROLES AND APPLICATION OF MEDICAL

PLAN IN PRUDENTIAL BANK SIMPANAN
NEGARA TAKAFUL
MUHAMMAD FAKRI BIN OTHMAN
BA
January 2020
UNIVERSITI TEKNOLOGI MARA
THE ROLES AND APPLICATION OF MEDICAL

PLAN IN PRUDENTIAL BANK SIMPANAN
NEGARA TAKAFUL
MUHAMMAD FAKRI BIN OTHMAN
Academic Writing submitted in partial fulfilment of the

requirements for the degree of
Bachelor in Muamalat (Hons.)
Academy of Contemporary Islamic Studies
January 2020
CONFIRMATION BY PANEL OF EXAMINERS
I certify that a Panel of Examiners has met to conduct the financial examination of
Muhammad Fakri Bin Othman on his Bachelor in Muamalat thesis entitled “The Roles
and Application of Medical Plan in Prudential Bank Simpanan Nasional Takaful” in
accordance with Universiti Teknologi MARA Act 1976 (Akta 173). The Panel of
Examiners recommends that the student be awarded the relevant degree. The Panel of
Examiners was as follows:
Mohammad Mahyuddin Khalid, MA

Senior Lecturer,
Academy of Contemporary Islamic Studies,
Universiti Teknologi MARA
(Supervisor)
Mohd Hafiz Abdul Wahab, MA

Senior Lecturer,
(Examiner)
NURHIDAYAH HASHIM, PhD

Associate Professor
Dean,
i
AUTHOR’S DECLARATION
I declare that the work in this thesis was carried out in accordance with the regulations
of Universiti Teknologi MARA. It is original and is the results of my own work, unless
otherwise indicated or acknowledged as referenced work. This thesis has not been
submitted to any other academic institution or non-academic institution for any degree
or qualification.
I, hereby, acknowledge that I have been supplied with the Academic Rules and
Regulations, Universiti Teknologi MARA, regulating the conduct of my study and
research.
Name of Student : Muhammad Fakri Bin Othman

Student I.D. No. : 2016669102
Programme : Bachelor in Muamalat – IC 210
Faculty : Academy of Contemporary Islamic Studies
Academic Writing Title : The Roles And Application Of Medical Plan In
Prudential Bank Simpanan Nasional
Signature of Student : …………………………………………….

Date : January 2020
ii
ABSTRACT
The insurance and takaful sector in Malaysia is viewed as a growing industry, the same
goes to family takaful. On average, the medical inflation shows double digit growth
every year. Recent reports and news has show many accidents and diseases that needed
medical treatment for hospital and its occurred to Malaysians, but majority of them are
unable to paid the treatment and needed to borrowing money and stuck with debt.
Moreover, in Malaysia, only small number of studies that have been made in these
recent years in this area of research. Driven by these certain factors, this paper is an
effort made into identifying the roles and application of medical plan in Prudential Bank
Simpanan Nasional Takaful. Also, this paper will also try to educate the society by
introducing the application of medical plan in takaful, along with its importance. Other
than that, this study also made accordance to the increasing cost of treatment, according
to statistics heart disease become major death cause.
iii
AKNOWLEDGEMENT
First and foremost, I am grateful to almighty God, Allah s.w.t; for the gift of good health
and times that helps me necessarily in completing this paper. Without His abundance of
blessing and guidance, I would never be able to finish this challenging journey in order
to complete my years of studies.
Next, my appreciation and thanks go to my supervisor Mr. Mohammad Mahyuddin

Khalid for his guidance, supports and tolerance throughout the completion of my thesis.
This research paper would not have been possible without his help, and I am thankful
for that. Also, my gratitude goes to my examiner, Mr. Mohd Hafiz Abdul Wahab, who
gives out good ideas and suggestions in ensuring my research paper is valid and relevant
to the faculty.
Furthermore, I would like to give all my thankfulness and appreciation to my parents,

my mother who helps in giving ideas for the paper and comforts me during my ups and
downs, and my father who encouraging me to persevere especially in the hardest of
times.
Last but not least, I also would like to express my appreciation towards my friends for
their continual support and helps in the making of this paper, and the staff at Shazay
Associates who helps me in obtaining data for the study. May Allah s.w.t bless all of
you with a lifetime of happiness.
iv
TABLE OF CONTENTS
CONFIRMATION BY PANEL OF EXAMINERS ................................................... i

AUTHOR’S DECLARATION ................................................................................... ii
ABSTRACT ................................................................................................................. iii
AKNOWLEDGEMENT............................................................................................. iv
LIST OF TABLE ....................................................................................................... vii
LIST OF FIGURE .................................................................................................... viii
LIST OF ABREVATIONS......................................................................................... ix
CHAPTER ONE: INTRODUCTION ........................................................................ 1

1.1 INTRODUCTION OF TAKAFUL ................................................................. 1
1.2 BACKGROUND OF STUDY ........................................................................ 2
1.3 BACKGROUND OF COMPANY.................................................................. 3
1.4 PROBLEM STATEMENT ............................................................................. 5
1.5 RESEARCH OBJECTIVE .............................................................................. 6
1.6 RESEARCH QUESTIONS ............................................................................. 6
1.7 SIGNIFICANCE OF STUDY ......................................................................... 6
1.8 SCOPE OF STUDY ........................................................................................ 7
1.9 LIMITATION OF STUDY ............................................................................. 8
1.9 DEFINITION OF TERMS .............................................................................. 8
CHAPTER TWO: LITERATURE REVIEW ......................................................... 10

2.1 DEFINITION OF FAMILY TAKAFUL ............................................................. 10
2.2 HISTORY OF TAKAFUL ................................................................................... 11
2.3 DALIL OF TAKAFUL ........................................................................................ 17
2.3.1 Dalil From Al-Quran .............................................................................. 17
2.3.2 Dalil From al-Sunnah ............................................................................. 19
2.3.3 Dalil From al-Ijma ................................................................................. 20
2.4 PRINCIPLES OF TAKAFUL ............................................................................. 21
2.4.1 Principle of Cooperation ........................................................................ 21
2.4.2 Principle of Sacrifice .............................................................................. 22
2.4.3 Principle of Indemnity ........................................................................... 22
v
2.4.4 Principles of Safety, Welfare and Protection ......................................... 23
2.5 ROLES OF FAMILY TAKAFUL ...................................................................... 23
2.6 SIGNIFICANTS OF HAVING FAMILY TAKAFUL ....................................... 25
CHAPTER THREE: RESEARCH METHODOLOGY ........................................ 28

3.1 DATA COLLECTION METHOD ....................................................................... 28
3.1.1 Documents Analysis ................................................................................... 28
3.1.2 Interview ..................................................................................................... 29
3.2 RESEARCH DESIGN ......................................................................................... 30
3.3 POPULATION, RESEARCH SAMPLE AND SAMPLING METHOD............ 31
3.4 DATA ANALYSIS METHOD ............................................................................ 31
CHAPTER FOUR: FINDINGS AND ANALYSIS ................................................. 33

4.1 INTRODUCTION ............................................................................................... 33
4.2 FINDINGS AND ANALYSIS ............................................................................ 33
4.2.1 Prudential Bank Simpanan Nasional (BSN) Takaful Berhad provide wealth
protection. ............................................................................................................ 33
4.2.2 Hospitalization and Medical Treatment ...................................................... 35
4.2.3 Medical Plan Of Prudential BSN Takaful ................................................. 37
CHAPTER FIVE: RECOMMENDATION AND CONCLUSION ....................... 48

5.1 INTRODUCTION ............................................................................................... 48
5.2 RECOMMENDATION ....................................................................................... 48
5.2.1 Education .................................................................................................... 48
5.2.2 Promotion .................................................................................................... 49
5.2.3 Approaching Activity By The Agents ........................................................ 49
5.3 CONCLUSION .................................................................................................... 49
BIBLIOGRAPHY ...................................................................................................... 52
vi
LIST OF TABLE
Tables Title Page

Table 2.1 The Chronology of Takaful in Malaysia from 13
1982 until 1992
1993 until 2000
2001 until 2010
2011 until 2020
Table 3.1 List of Respondents 30
vii
LIST OF FIGURE
Figures Title Page

Figure 2.1 The allocation of takaful contribution 10
Figure 4.1 The application of Smart Value Point if the 40
usage is exceeded
viii
LIST OF ABREVATIONS
BSN Bank Simpanan Nasional

BNM Bank Negara Malaysia
PAL Pre-authorization Letter
ix
CHAPTER ONE
INTRODUCTION
1.1 INTRODUCTION OF TAKAFUL
Islam never forbids Muslims to form something within the worldly affairs
within the interest of humanity provided in accordance with the principles of
Muslim jurisprudence. this is often the wonder of Islam that's therefore superior. In
fact, Islam encourages its followers to be wise in managing their lives so as to attain
success during this world and also the hereafter. Among the areas that saw the nice
innovations of Muslims nowadays is that the field of takaful. Takaful is a good
methodology of managing risk and may meet the requirements of this community.
additionally, it meets the principles of Islam so it is a gain in this world and hereafter.
The development of takaful in modern world was ab initio undertaken in Sudan
in 1979 and Malaysia in 1984. because the results of the 1985 Fiqh Academy ruling
declaring that standard insurance was haram (forbidden), whereas insurance
supported cooperative principles, Islamic law compliance, and charitable donations
are acceptable. The birth of takaful business in Malaysia was shown by Takaful Act
1984 in Nov 1984. what is more, the event of takaful business in Malaysia had
shown a stimulating performance.
Muslims need to do what Islam has asked and avoid what Islam has prohibited.
In daily life, Muslim must influence any business in keeping with jurisprudence. It
is similar when it goes to insurance. The emergence of Islamic Insurance as another
of standard or conventional insurance, in which according to sharia is not in line,
because of riba (usury), gharar (uncertainty), and maysir (gambling). The
performance of Muslim insurance or known well as Takaful has showed a
stimulating growth from time to time. because the result, it's a remarkable subject
to be explored. The Takaful business incorporates has large potential to be
highlighted. However, still, there are many people that don't grasp what takaful is,
and also the term takaful itself looks not familiar since it's an Arabic term.
1
Takaful is derived from the Arabic word ' kafala,' meaning that takaful overall
security can be defined as a security partnership where a group of participants
agreed to assist other participants in the event of any loss. Takaful is generally
referred to as Islamic insurance because the system is based on the concept of social
solidarity, co-operation and member loss compensation. Also known as co-
operative or mutual insurance is the Takaful system, where members contribute a
certain amount of money to a shared pool. To fulfill that participant's duty to make
a complete donation (or tabarru’) to the fund operated by a third party called the
Takaful operator also known as agents or brokers. The principle of takaful is where
a group of people engage in a scheme that allows them to share the burden of any
misfortunes suffered by any of the participants, and where appropriate,
compensation is paid using contributed funds from the participants.
According to the Ernst and Young World Takaful Report (2011), cited in the
news from the International Insurance and Healthcare Industry, the global
contribution from Takaful would increase by 31% to USD 12 billion in 2011 from
USD 9.15 billion in 2010. Moreover, the fast-growing Takaful industry is
concentrated mainly in Saudi Arabia (making the industry up 3.86 billion dollars in
2009), Malaysia (1.15 billion dollars), UAE (640 million dollars), South East Asia
and North Africa.
1.2 BACKGROUND OF STUDY
This research focuses mainly on roles and application of the medical plan in
Prudential Bank Simpanan Nasional (BSN) Takaful in, especially in modern days
where the inflation rate of of healthcare increasing year by year which is 11.5
percent in 2016 and it is increasing to 12.7 percent in year 2017 according to an
article written on The Edge Markets dated back on August 2017 (Lin, 2017). In the
modern era there are lots of insurance offered. Takaful has been established in its
modern form for more than 30 years and firms that offer Shariah-compliant
insurance protection have grown significantly both in number and scale. Obviously,
there are many conventional insurance company to cover health or losses in
accidents to be choice. But, to comes in the need of religion, for instance, Islam, the
Muslim customers need to find an alternative.
2
Similar to insurance, takaful is financial protection as seen by Islam which
designed to be in line with Islamic principles and is based on the principles of
tabarru’ and ta’awwun which is mutual assistance. To be acceptable in Islam,
insurance must avoid payment of interest or riba’. Other requirements, free from
element of gambling which is maisir and gharar, uncertainty and unclear also
prohibited. Takaful business in Malaysia divided into general takaful and family
takaful. In this research, the researcher focuses to discuss on family takaful.
There are varities risks protected under the family takaful, risk of early death.
Death is a sure thing for all mankind. However, no one knows when they will die.
Everyone is at risk early death at all times. The financial impact of an early death
the breadwinner can be prolonged. So many families are faced financial challenges
for years after losing a living family. Family Takaful Plans can be an effective way
to provide some financial security measures in the context of such contingencies.
Besides, the risk of living too long or longevity risk of old age may result in income
insufficient to cover retirement, for instances, health and costs medicine, cost of
living, and emergency needs. Instead, there is some people are looking forward to
retirement because that's the time relax, travel and enjoy life. Therefore, family
Takaful can be a long-term instrument for plan for future financial needs.
Moreover, risk of disability and health problems, risk of disability and health
problems are often associated with high medical expenses, medical expenses can
affect your overall savings if needed continuous and long-term medicine also loss
and reduction of income capacity. Someone who is destined to be disabled or has
health problems may not have the same income as before. It's possible due to
limitations in movement and impulsive thinking the ability to work full-time may
not be possible performed due to a need to return to the hospital or medical center
for routine treatment. These factors will reduce the potential for revenue someone.
And this is the risk that are will be discussed by the researcher in this research.
1.3 BACKGROUND OF COMPANY
Prudential Assurance Malaysia Berhad (PAMB) was established in

Malaysia in 1924. Prudential sets sail to Borneo on 1935. Before being called
PAMB, Prudential was then known as Berjaya Prudential Assurance Berhad.
3
On the Year 1997, PAMB was the first to launch an Investment Product (PIA).
The Company was then renamed as Prudential Assurance Malaysia Berhad on
1998. For its 2017 financial year ended 31 December 2017, it achieved RM1.61
billion in new business sales. New business sales include both life insurance
sales and takaful contributions. Takaful products distributed by PAMB’s wealth
planners and agents are underwritten by Prudential BSN Takaful Berhad.
(Prudential, n.d.)
As a leading and innovative insurer, PAMB serves the savings, protection
and investment needs of Malaysians by offering a full range of financial
solutions through its 45 branches and bancassurance distribution partners
network nationwide. With more than 1,700 employees, PAMB is committed to
helping people achieve their ambitions for a brighter and financially secure
future. PAMB is an indirect wholly owned subsidiary of UK-based Prudential
plc. Prudential plc is incorporated in England and Wales, and its affiliated
companies constitute one of the world's leading financial services groups
serving around 26 million customers and has £669 billion of assets under
management (as at 31 December 2017). Prudential plc is listed on the stock
exchanges in London, Hong Kong, Singapore and New York.
Prudential plc is not affiliated in any manner with Prudential Financial, Inc,
a company whose principal place of business is in the United States of America.
PAMB is an indirect wholly owned subsidiary of UK-based Prudential plc.
Established in London in 1848, Prudential plc is incorporated in England and
Wales, and its affiliated companies constitute one of the world's leading
financial services groups. It provides insurance and financial services through
its subsidiaries and affiliates throughout the world. Prudential plc has been in
existence for 168 years, and has £599 billion in assets under management as at
31 December 2016. Prudential plc is not affiliated in any manner with Prudential
Financial, Inc, a company whose principal place of business is in the United
States of America.
Prudential Bank Simpanan Nasional (BSN) Takaful was founded in 2006
and is a joint venture between Bank Simpanan Nasional and Prudential plc, who
have 51 and 49 percent stakes respectively. Established in 2006 by a license
issued by Bank Negara Malaysia, Prudential Bank Simpanan Nasional (BSN)
4
Takaful today is Malaysia's leading takaful operator providing financial security
for Malaysians and their families. (Prudential BSN Takaful, n.d.)
PruBSN has over 16,000 takaful consultants serving over 800,000 clients
with a variety of first-place positions in the local takaful industry and has
received numerous awards. For seven consecutive years since 2011, PruBSN
has been the No. 1 Family Takaful Operator and in 2017, our company achieved
RM467.5 New Business Production with 31% market share as confirmed by
industry rating agency, Insurance Services Malaysia.
The rapid development is the result of a customer-friendly approach, multi-
channel distribution strategies, innovative solutions and technology leadership.
Guided by the ‘Takaful For All’ proposition. ‘For Life’, PruBSN aim to build a
strong and lasting impact to help develop Malaysia through the protection of
wealth and investment in the capital market, while fulfilling their vision of being
be the first choice Takaful provider for our people and communities. Also to
accomplish their mission in securing the future of Malaysian families through
innovative solutions built on Islamic values.
1.4 PROBLEM STATEMENT
We often hear the case the high cost of treatment is the major cause of
debt among the individual and families in Malaysia, because of the high cost of
treatment and according to Health Care Asia Organization, medical inflation in
Malaysia is third highest among Asian countries after India at 14% and
Indonesia at 13.1%. Moreover Healthcare inflation rates are increasing year-by-
year in Malaysia, which is 11.5 percent in 2016 and is rising to 12.7 percent in
2017, according to an August 2017 report on The Edge Markets. (Lin, 2017)
Moreover, the percentage of people who have life insurance or a takaful
plan is still low, with an estimated 34 out of 100 insured (The Star, 2019). In
Malaysia, family Takaful market is still at a lower penetration level if we were
to compare to other developed countries even though the Takaful industry
continues to sustain strong performance amidst challenges in a competitive
environment.
5
Heart disease has remained the leading cause of death among Malaysians
for 13 years from 2005 to 2017, said Deputy Health Minister Dr Lee Boon Chye.
He said non-communicable diseases such as diabetes and hypertension, obesity,
and unhealthy diet and lifestyle also contributed to the increase. With the heart
disease become leading of death, family Takaful played crucial role in assisting
the cost of the medical treatment (The Star, 2019).
1.5 RESEARCH OBJECTIVE
This research have two research objectives about family takaful and it’s role in
hedging critical illness. The objectives are:
1) To understand roles of medical plan in Prudential Bank Simpanan Negara
Takaful to the certificate holders.
2) To study the application of medical plan in Prudential Bank Simpanan
Negara Takaful.
1.6 RESEARCH QUESTIONS
In seeking objectives of study, the following questions were highlighted to be

the framework providing guideline for the study work:
1) What is the roles of medical plan in Prudential BSN Takaful to the certificate
holders?
2) How does medical plan being applied in Prudential BSN Takaful?
1.7 SIGNIFICANCE OF STUDY
This research important:

1) Public
This study focuses on the public especially the Malaysians as the topics of
the discussion about the family Takaful. This research is very important to the
6
public because from that the public can know how the family Takaful can help
them in critical situations. There are many role of family Takaful such as income
protection, life protection, medical, savings, for child education, retirement and
investment. This research only focuses on the role of Takaful mainly on the
medical because the Malaysia healthcare inflation rate was 11.5 percent in 2016,
this medical issues can be a burden to a family if one of them facing medical
situation such as treatment for cancer and many more.
2) Takaful Industries
As a result of this study, it became the important ingredients especially in
the field of Muamalat and Takaful industries in order to create suitable strategies
for the purpose to enhance the society to use takaful product compare to
conventional insurance. This is because takaful is seen can solving the problem
of financial and Islamic economic. In this study, it can supply some knowledge
to takaful industry especially about the demand for takaful products. The
industry will be able to create the new Takaful products in order to meet
customer demand. Certain information is provided in this study, especially from
industry. It can assist the industry to design new marketing strategies to attract
people to takaful products.
3) Academic Research
This study will give benefit to academic research in the field of Muamalat
and Takaful industry. This study also may benefit to academicians and
policymakers as a sources of references. This study still lacks knowledge,
especially on academic and professional quantum.
1.8 SCOPE OF STUDY
This study is conducted on the roles and application of medical plan in

Prudential Bank Simpanan Negara Takaful. The common illness among
Malaysians are important to look on to make sure that the roles and application
of medical plan in Prudential Bank Simpanan Negara Takaful can be justify
firmly. Family Takaful have variety of role in financial of an individual or
family, this research focus on it’s role in assisting it’s participants in medical
situations and application of the medical plan in the Prudential Bank Simpanan
7
Nasional (BSN) Takaful because not many of them know well about the
function and role of family Takaful as the penetration of Takaful market is still
consider low.
1.9 LIMITATION OF STUDY
The limitation of the study refers to the possibility of a weakness of the study
which is beyond the control of the researcher involving the parameters in the
survey methodology such as the selection of non-random sample, the size of the
small sample, the effect of external variables or moderator variables identified
to the researcher. These limitations limit the scope of the study findings and
limit the generalization made to the context of research under the control of
researchers.
1. Title Limitation
The research was limit to the The research was limit to the product of
Prudential Bank Simpanan Negara Takaful only. And the roles of the Family
takaful is limited only to its functions in assisting risk of medical treatment. The
purposive sampling method that used in this research may have led to biases in
selection respondents due to time and resource constraints. The researchers only
fouses on the roles and application of medcal plan in Prudential Bank Simpanan
Negara Takaful, the researcher pick only 5 respondents comes from takaful
consultant in Shazay Associates to gain knowledge more about the title of the
researcher.
2. Respondent Limitation
The research was limit to the Takaful consultant of PruBSN which is 5
persons only. The average age of them between 21-35 years old. All of them
comes from same company under Prudential which is Shazay Associates and
some of them are unit manager.
1.9 DEFINITION OF TERMS
8
This study uses some terms that need to be given definition so that the
understanding of these terms is clear in the context of this study. Some
operational definitions of the study can be stated as follows:
1. Takaful
The word 'Takaful' comes from the Arabic verb 'kafala' which means
keeping or guiding one's needs. Consequently, the consensus between
at least two parties to mutual consent to each other in the event of loss
due to disaster or disaster, it is defined as 'Takaful'. Likewise, the
mutual guarantee is an important element in the concept of Takaful that
can be translated into managing business operations. (ISRA, 2011)
2. Medical
According to Cambridge Dictionary, Medical mean examination of a
person's body by a doctor in order to discover if that person is healthy,
sometimes done before a person can be accepted for a particular job. It
also mean of or relating to medicine, or for the treatment of disease or
injury. (Cambridge Dictionary, n.d.)
3. Prudential Bank Simpanan Nasional Takaful
Prudential Bank Simpanan Nasional (BSN) Takaful was founded in
2006 and is a joint venture between Bank Simpanan Nasional and
Prudential plc, who have 51 and 49 percent stakes respectively.
Established in 2006 by a license issued by Bank Negara Malaysia,
Prudential Bank Simpanan Nasional (BSN) Takaful today is Malaysia's
leading takaful operator providing financial security for Malaysians and
their families. (Prudential BSN Takaful, n.d.)
9
CHAPTER TWO
LITERATURE REVIEW
2.1 DEFINITION OF FAMILY TAKAFUL
Takaful's global contribution would increase by 31 percent to USD 12 billion in

2011 from USD 9.15 billion in 2010, according to the Ernst and Young World Takaful
Report (2011), cited in the International Insurance and Healthcare Industry news. In
addition, the fast-growing Takaful industry is mainly concentrated in Saudi Arabia (up
$3.86 billion in 2009), Malaysia (1.15 billion dollars), UAE (640 million dollars), South
East Asia and North Africa.
According to Farrukh Habib & Mughees Shaukat (2016), to acquire the Takaful
scheme, the contributors of the Takaful scheme (certificateholders) regularly pay an
agreed amount based on the type of policy they want to use. Contributors’ payments go
into a shared pool that the Takaful Company operates and maintains based on
Mudharabah, Wakalah, Ju’alah or a combination of various Islamic contracts.
Family Takaful is a Takaful scheme that provides participants with long-term
protection and savings. One participant of the Family Takaful Plan agrees to contribute
or contribute to the Takaful fund. Some of the contributions will be allocated to the fund
(Participant’s Risk Fund) as tabarru' (donation) and the other part to savings and
investment (Participant’s Investment Fund).
Takaful Contribution
Participant’s Investment
Participant’s Risk Fund
Fund
Figure 2.1: The allocation of takaful contribution
10
The Participant Investment Fund is an investment portion of the participant's
Takaful contribution (contribution) that will be credited for savings and investment
purposes. Takaful Operators will invest participants' funds in this fund. The benefits of
the investment will be treated as follows. Under the Mudharabah Profit Model the profit
will be shared between the participants and the Takaful Operator at a pre-agreed ratio.
Meanwhile, under the Wakālah Model, the net Profit (after deducting the Wakalah fee)
will be credited into the Participant Investment Fund.
Secondly, the Participant’s Risk Fund, the Participant Risk Fund is the remainder
of the participant's Takaful contribution credited as participation contribution (tabarru').
The portion allocated to the Risk Fund will be used for the purpose of assisting fellow
takaful participants in the event that any participant is in danger of death or permanent
disability. If the participant does not face the disaster until the plan reaches maturity,
the surplus from the Participant Risk Fund will be treated as follows, the profit will be
shared between the participants and the Takaful Operator in a pre-agreed ratio under the
Mudharabah Profit Model. While, the net profit will be attributed to the Participant
Investment Fund under the Wakālah System (after deduction of the Wakalah fee).
In family Takaful, generally, all participants contribute to two main purposes.
First, to provide mutual compensation among all participants, the contribution made is
considered a donation or Tabarru’ to the Takaful fund. Second, the donation is also
considered to be savings and investments for them or the good of their families.
(Rabiah Adawiah Engku Ali, 2008)
It is viewed as a defense of the property of the participants concerning the use of the
family Takaful. Besides, the Takaful community is also used for saving and investment
instruments like the purpose of accounts of participants. In other words, a family
Takaful plan is a long-term saving and investment resource that also provides shared
financial assistance in case of participants’ death. (Gustina & Abdullah, 2012)
2.2 HISTORY OF TAKAFUL
The history of takaful started with the al-Aqilah practice This is a practice that
became the custom of ancient Arab tribes, which was introduced to replace the
11
"blood for blood" barbaric system. Under this system, if one of the clans was
murdered by another tribe, close kinsmen known as 'Aqilah' or 'Ma'aqil' in Arabic
terms were required to pay a "blood money" as compensation to the heirs. They will
collect and donate on behalf of the killer. Payment of "blood money" seems to be a
form of financial protection for the deceased's heirs against the unexpected death of
the victim (IBFIM, 2018).
This practice of al-Aqilah has been confirmed by Prophet Muhammad SAW and
stated in the first Medina Constitution (Mithaq al-Madina). The Constitution of
Medina declared shortly after the migration to Medina in 622 AD was the greatest
example of how Prophet Muhammad SAW had justified the concept of takaful. The
constitution that has been enacted for the people of Medina is the first Takaful
scheme announced by the first Muslim nation. The Constitution of Medina states
that:
"The immigrants among the Quraish will be responsible for their words and will
pay their blood money in co-operation". This is in line with the doctrine of 'Aqilah'.”
The next Aqilah system was later on developed during the second Islamic Caliph,
Saidina Umar al-Khattab r.a. He has set up Diwan of Mujahidin in each district to
expand cooperation to donate money from killing among their own tribes performed
by others from the same tribe.
The development of the Takaful industry in Malaysia in the early 1980s was
inspired by the prevailing needs of the Muslim public for A Shariah-compliant
alternative to conventional insurance, as well as to complement the operation of the
Islamic bank that was established in 1983. It was, to a large extent, triggered by the
a decree issued by the Malaysian National Fatwa The committee which ruled that
life insurance in its present form is a void contract due to the presence of the
elements of Gharar (uncertainty), Riba’ (usury) and Maisir (gambling).
Malaysia has long adopted a comprehensive approach to the development of
Islamic financial systems involving Islamic banking, takaful and Islamic money and
capital components. The development of organized core components and the
provision of a conducive environment for the Islamic financial system have
successfully sourced resources and generated productive economic activities. This
situation allows takaful operators to move in line with conventional insurance
providers in providing products that are not only competitive but are Shariah-
compliant. The comprehensive structure also enhances the resilience and stability
12
of the Islamic financial system to withstand financial shocks and contributes
towards enhancing the overall stability of the Malaysian Islamic financial system.
The development of the Malaysian takaful industry began in the early 1980s has
shown significant growth throughout the time. It produced strings from the needs of
the Muslims at that time in favor of an alternative to existing conventional
insurance. The existence of the takaful industry is largely influenced by the decision
of the National Fatwa Committee of Malaysia to decide that life insurance in its
current form is an invalid contract because it has elements of Gharar (uncertainty),
Riba (usury) and Maisir (gambling). The Special Task Force was set up by the
Government in 1982 to study the feasibility of establishing an insurance company
in accordance with Islamic claims. According to a team study, the Takaful Act was
enacted in 1984 and the first takaful operator was incorporated in Malaysia in
November 1984.
A Special Task Force was established by the the government in 1982 to study
the viability of the setting up of an Islamic insurance company. Following the
recommendations of the Task Force, the Takaful Act was enacted in 1984 and the
first Takaful operator was incorporated in Malaysia in November 1984 which is
known as Syarikat Takaful Malaysia. The development of the takaful industry in
Malaysia is a healthy and competitive development. The industry continues to grow
to this day with the capacity of 12 takaful operators comprising family takaful and
general takaful.
Starting in 1984, the first takaful company, Takaful Malaysia Berhad (STMB)
was established. Then MNI Takaful Sdn. Bhd (MNIT) was established in 1993
which is known as Malaysia National Insurance Sdn Bhd. In 2001, Maybank
Takaful was established followed by Takaful Ikhlas Sdn. Bhd. (TISB) was
established in 2003. Next in 2006, Commerce Takaful Berhad was inaugurated to
make the 5th takaful in the whole industry at that time (Zamani Abdul Ghani, 2006).
Chronologies of events of the Malaysian takaful industry are as follow:
Table 2.1: The Chronology of Takaful in Malaysia from 1982 until 1992
Phase I (1982-1992)
1982 The Special Task Force was set up to study the establishment of an Islamic
insurance company.
13
1984 The Takaful Act 1984 has been gazetted.
Takaful Malaysia Bhd. (STMB) is incorporated.
1988 BNM started the supervision of the Insurance and Takaful industry.
Phase II (1993-2000)
1993 MNI-Takaful Sdn. Bhd. started operating.
1995 Establishment of ASEAN Takaful Group.
1997 The establishment of ASEAN Retakaful International (L) Ltd. based at
the International Offshore Financial Center, Labuan.
Appointment of members - National Sharī'ah Advisory Council for
Islamic Banking and Takaful.
1998 MNI-Takaful changed its name to Takaful Nasional Sdn. Bhd.
2000 STMB and National Takaful (now known as Etiqa
Takaful) jointly develop the Code of Ethics for the industry.
Phase III (2001-2010)
2001 Establishment of IBFIM.
BNM launches the Financial Sector Masterplan.
2002 Mayban Takaful Bhd. started operating.
The establishment of the Malaysian Takaful Association.
Islamic Financial Services Board -IFSB was inaugurated.
2003 Takaful Ikhlas Bhd. started operating.
14
2004 Principal approvals were granted to Commerce Asset Holdings Bhd. to
run Takaful business.
2005-2007 Sun Life Malaysia Takaful, HSBC Amanah Takaful, MAA Takaful,
Hong Leong MSIG Takaful, Prudential BSN Takaful commenced
operations.
2006 Establishment of the International Financial Center of Malaysia.
2008-2010 Establishment of Four Retakaful Operators: ACR Retakaful Bhd,
MNRB Retakaful Bhd, Munich Re Retakaful Bhd, Swiss Re Retakaful
Bhd.
The Inter-Takaful Controlling Agreement (ITA) is signed on a official.
2009 IFSB-8 issued Takaful governance and IFSB-10 issued Sharī'ah
governance principles.
The establishment of AIA International Takaful Bhd.
2010 IFSB-11 issued solvency for Takaful.
Announcement of four new Family Takaful licenses.
The establishment of Great Eastern Takaful Bhd.
Phase IV (2011-2020)
2011 BNM launches the 2011-2020 Financial Sector Blueprint.
2012 AIA AFG Takaful, ING PUBLIC Takaful Ehsan and AmMetLife
Takaful commenced operations.
The Corporation Malaysia Deposit Insurance Corporation 2011 is
gazetted.
15
2013 Enforcement of Takaful Operational Framework and revise the Syariah
Governance Framework.
2014 Takaful Risk-Based Capital Enforcement.
2015 Internal Capital Adequacy Assessment Process (ICAAP) for Takaful
Operators.
Appointed Actuary and Goods & Services Tax (GST).
2016 Financial Reports & Operations Financial Ombudsman Scheme is
introduced
2017 LIFE Framework & Motor Liberalization Phase and Fire Tariffs are
introduced.
2018 Conversion to a single Takaful business.
Lists Of Takaful Institution In Malaysia (Bank Negara Malaysia, n.d.)

1. AIA Public Takaful Berhad
2. Ammet Life Takaful berhad
3. Etiqa Family Takaful Berhad
4. Etiqa General Takaful Berhad
5. FWD Takaful Berhad
6. Great Eastern Takaful Berhad
7. Hong Leong MSIG Takaful Berhad
8. Prudential BSN Takaful Berhad
9. Sun Life Malaysia Takaful Berhad
10. Syarikat Takaful Malaysia Am Berhad
11. Syarikat Takaful Malaysia Keluarga Berhad
12. Takaful Ikhlas Family Berhad
16
13. Takaful Ikhlas General Berhad
14. Zurich General Takaful Malaysia Berhad
2.3 DALIL OF TAKAFUL
Although there is no specific reference to the law on the implementation of the

takaful system, the basic details related to it in the form of recommendations that
promote the implementation of the concept, can be found through the Quran, al-
Sunnah and even al-Ijma.
2.3.1 Dalil From Al-Quran
Allah said in the al-Quran:
ِ ‫اْلثْ ِم َو ْالعُد َْو‬

‫ان‬ َ ‫علَى ْال ِب ِر َوالت َّ ْق َو ٰى ۖ َو ََل ت َ َع َاونُوا‬
ِ ْ ‫علَى‬ َ ‫َوتَ َع َاونُوا‬
“but rather help one another in furthering virtue and God-
consciousness, and do not help one another in furthering evil and
enmity”
al-Ma’idah (5): 2.
If we try to understand the ayah "birr" and "taqwa" which Allah SWT
commands in the above verse, from one angle we will find that both have the
same meaning. But from the other point of view, the meanings of the two are
different and complement each other. And it is no exaggeration to say that they
all bring together everything pertaining to the affairs of a Muslim's life, whether
in faith, devotion or spirituality, or in the affairs of life or social relations. This
clearly shows that the takaful contained in the above verse covers religious
matters as well as world affairs. (Islamic Banking and Finance Institute
Malaysia)
Allah also said in another verse:
‫ِإنَّ َما ْال ُمؤْ ِمنُونَ ِإ ْخ َوة‬
“All believers are but brethren.”
17
al-Hujurat(49): 10.
As for the above verse, explains the attitude of helping one another in
kindness and piety is built on the basis of brotherhood and love.
While in another verse Allah Almighty says:
‫سانًا َوبِذِي ْالقُ ْربَ ٰى‬

َ ‫ش ْيئًا ۖ َوبِ ْال َوا ِلدَي ِْن إِ ْح‬
َ ‫َّللاَ َو ََل ت ُ ْش ِر ُكوا بِ ِه‬
َّ ‫َوا ْعبُدُوا‬
‫ب‬
ِ ‫اح‬ ِ ‫ص‬ َّ ‫ب َوال‬ِ ُ‫ار ْال ُجن‬
ِ ‫ار ذِي ْالقُ ْر َب ٰى َو ْال َج‬ ِ ‫ين َو ْال َج‬ِ ‫سا ِك‬َ ‫َو ْال َيتَا َم ٰى َو ْال َم‬
َ َّ ‫ت أ َ ْي َمانُ ُك ْم ۗ ِإ َّن‬
َ‫َّللا ََل ي ُِحبُّ َم ْن َكان‬ ْ ‫س ِبي ِل َو َما َملَ َك‬ ِ ‫ِب ْال َج ْن‬
َّ ‫ب َواب ِْن ال‬
ً ‫ُم ْخت َ ًاَل َف ُخ‬
‫ورا‬
“And Worship God [alone], and do not ascribe divinity, in any

way, to aught beside Him. And do good unto your parents, and
near of kin, and unto orphans, and the needy, and the neighbour
from among your own people, and the neighbour who is a
stranger, and the friend by your side, and the wayfarer, and those
whom you rightfully possess. Verily, God does not love any of
those who, full of self-conceit, act in a boastful manner”
al-Nisa (49): 36.
ِ ‫إِ َّن ٰ َه ِذ ِه أ ُ َّمت ُ ُك ْم أ ُ َّمةً َو‬

ِ ‫احدَة ً َوأَنَا َربُّ ُك ْم فَا ْعبُد‬
‫ُون‬
“Verily, [O you who believe in Me,] this communIty of yours is

one single community, since I am the Sustainer of you all:
worship, then, Me [alone]!”
al-Anbiyaa (21): 92
The above two verses also cover all forms of takaful, beginning with the
purification of one person from enlisting Allah Almighty to protect himself from
the torment, and then his relationship with his relatives, neighbors, and finally
the whole of Islam.
18
2.3.2 Dalil From al-Sunnah
‫ع ْن‬َ ‫ َو‬.‫ع ِن النَّ ِبي ِ صىىلى ه عليه ومىىلم‬ َ ‫ع ْن أَنَس رضىىى ه عنه‬ َ
‫ع ِن النَّبِي ِ صىىىىىلى ه‬ َ ‫ع ْن أنَس‬ َ َ ْ
َ ُ ‫سىىىىىيْن ال ُمعَ ِل ِم قَا َل َحدَّثنَا قَتَادَة‬
َ ‫ُح‬
ُّ‫عليه ومىىىىىىلم َقا َل " َل يُؤْ ِم ُن أ َ َحد ُ ُك ْم َحتَّى ي ُِحبَّ أل َ ِخ ي ِه َما ي ُِحب‬
." ‫ِلنَ ْف ِس ِه‬
Narrated Anas:
The Prophet (‫ )ﷺ‬said, "None of you will have faith till he wishes
for his (Muslim) brother what he likes for himself."
(al-Bukhari)
In another hadith, the Messenger of Allah (may peace be upon him) said:
‫َّللاِ صلى‬ ُ ‫ع َم َر ـ رضى ه عنهما ـ أ َ ْخبَ َرهُ أ َ َّن َر‬

َّ ‫مو َل‬ َ ‫أ َ َّن‬
َّ َ‫ع ْبد‬
ُ َ‫َّللاِ بْن‬
ْ َ‫ه عليه وملم قَا َل " ْال ُم ْس ِل ُم أ َ ُخو ْال ُم ْس ِل ِم َلَ ي‬
ُ‫ظ ِل ُمهُ َوَلَ يُ ْس ِل ُمه‬
َّ َ‫َو َم ْن َكانَ فِي َحا َج ِة أ َ ِخي ِه َكان‬
." ‫َّللاُ فِي َحا َجتِ ِه‬
Narrated Àbdullah bin Ùmar:
Allah's Messenger (‫ )ﷺ‬said, "A Muslim is a brother of another

Muslim. So he should neither oppress him nor hand him over to
an oppressor. And whoever fulfilled the needs of his brother,
Allah will fulfill his needs."
(al-Bukhari)
While in another hadith, he said:
‫ع ِن النَّبِي ِ صلى ه عليه وملم قَا َل " ْال ُمؤْ ِم ُن‬ َ ‫َع ْن أَبِي ِه أ َ ِبي ُمو‬
َ ‫مى‬
َ َ ‫شب ََّك َبيْنَ أ‬
‫صابِ ِع ِه‬ َ ‫ ث ُ َّم‬." ‫ضا‬
ً ‫ضهُ بَ ْع‬ ِ َ‫ِل ْل ُمؤْ ِم ِن َك ْالبُ ْني‬
ُ َ‫ان ي‬
ُ ‫شدُّ بَ ْع‬
Narrated Abu Musa:
The Prophet (‫ )ﷺ‬said, "A believer to another believer is like a

building whose different parts enforce each other." The Prophet
(‫ )ﷺ‬then clasped his hands with the fingers interlaced.
(al-Bukhari)
19
He said:
‫َّللاِ صلى ه عليه وملم‬ َّ ‫مو ُل‬ ُ ‫م ِم ْعتُ النُّ ْع َمانَ بْنَ بَشِير يَقُو ُل قَا َل َر‬ َ
َ ‫ط ِف ِه ْم َك َمث َ ِل ْال َج‬
‫س ِد ِإذَا‬ ُ ‫" ت َ َرى ْال ُمؤْ ِمنِينَ فِي ت َ َرا ُح ِم ِه ْم َوت َ َو ِاد ِه ْم َوت َ َعا‬
." ‫س َه ِر َو ْال ُح َّمى‬
َّ ‫س ِد ِه بِال‬ َ ُ‫عض ًْوا تَدَا َعى لَه‬
َ ‫مائِ ُر َج‬ ُ ‫ا ْشت َ َكى‬
Narrated An-Nu`man bin Bashir:
Allah's Messenger (‫ )ﷺ‬said, "You see the believers as regards

their being merciful among themselves and showing love among
themselves and being kind, resembling one body, so that, if any
part of the body is not well then the whole body shares the
sleeplessness (insomnia) and fever with it."
(al-Bukhari)
Based on the above hadiths, it is clear that the practice of cooperation

and helping one another, especially those in need is greatly encouraged by Islam.
2.3.3 Dalil From al-Ijma
Takaful mediation can be seen when one time, Umar took the wealth of
the rich and distributed it to the needy, saying: "Truly I want to help those in
need. When we are weak, we help each other out so that we can have enough.”
(Rabi' Mahmud al-Rubi, 1998) This underlines the importance of a spirit of
cooperation and assistance to those in need.
Based on the arguments presented above, the authors are of the opinion
that the takaful scheme as practiced in most Islamic countries today, including
in our country, can be regarded as maslahah mursalah because there are no
specific provisions regarding its law. However, there are many arguments in the
Quran, al-Sunnah and even the Ijmak related to takaful in the form of
suggestions and encouragement on the implementation of the concept. This
clearly shows that the implementation of the takaful system as it is today is in
line with Islamic teachings and are not in conflict with the nas or dalil from al-
20
Quran and al-Sunnah. In addition, it can also benefit the public, not just
individuals or groups.
2.4 PRINCIPLES OF TAKAFUL
Based on the above on the definition and dalil of takaful, it can be concluded
here that there are several key principles that underpin the underlying
implementation and Takaful system. The main principles in takaful are as follows:
2.4.1 Principle of Cooperation
The principle cooperation here is specific to those things that bring

abundance or good (al-birr) to mankind and also increase the devotion (al-
taqwa) to God. In Islam, the good and the good of humanity are referred to in
the context of "habl min al-nas" and piety to Allah in the context of "habl min
Allah". Therefore, the implementation of takaful refers to the implementation of
the concept of "al-birr" among humans which will also enhance or nourish the
human devotion to Allah Almighty (Syed Mohd Ghazali Wafa Syed Adwam
Wafa,et. al., 2005). This is in line with the word of Allah Almighty:
ِ ‫اْلثْ ِم َو ْالعُد َْو‬

‫ان‬ َ ‫علَى ْال ِب ِر َوالت َّ ْق َو ٰى ۖ َو ََل ت َ َع َاونُوا‬
ِ ْ ‫علَى‬ َ ‫َوتَ َع َاونُوا‬
“but rather help one another in furthering virtue and God-
consciousness, and do not help one another in furthering evil and
enmity”
al-Ma’idah (5): 2
In fact, the verse is the very core of the takaful system. From the meaning
of the verse itself, it is understandable that the scope of the takaful protection is
only on matters related to welfare and piety and matters which are not in conflict
with Shariah. So, those things contrary to Islamic law such as suicide and death
from alcoholic beverages is not covered under the takaful scheme as it is an act
prohibited in Islam. (Redzuan, 2006)
21
2.4.2 Principle of Sacrifice
The principle of sacrifice can be manifested through the concept of al-

tabarru’ when an individual prioritizes the public or society's interests above his
own. Therefore, this sacrifice is a measurement of one's faith level. Moreover,
when one commits tabarru 'or sacrifice, it is believed that tabarru' will be the
ransom for his needs in the hereafter by Allah Almighty. (Syed Mohd Ghazali
Wafa Syed Adwam Wafa,et. al., 2005)
This principle of sacrifice can be understood by reference to the hadiths
of the Messenger of Allah as follows:
‫َّللاِ صلى‬ ُ ‫ع َم َر ـ رضى ه عنهما ـ أ َ ْخبَ َرهُ أ َ َّن َر‬

َّ ‫مو َل‬ َ ‫أ َ َّن‬
َّ َ‫ع ْبد‬
ُ َ‫َّللاِ بْن‬
ْ َ‫ه عليه وملم قَا َل " ْال ُم ْس ِل ُم أ َ ُخو ْال ُم ْس ِل ِم َلَ ي‬
ُ‫ظ ِل ُمهُ َوَلَ يُ ْس ِل ُمه‬
َّ َ‫َو َم ْن َكانَ ِفي َحا َج ِة أ َ ِخي ِه َكان‬
." ‫َّللاُ ِفي َحا َج ِت ِه‬
Narrated Àbdullah bin Ùmar:
Allah's Messenger (‫ )ﷺ‬said, "A Muslim is a brother of another

Muslim. So he should neither oppress him nor hand him over to
an oppressor. And whoever fulfilled the needs of his brother,
Allah will fulfill his needs." (al-Bukhari)
‫النَّ ِبي ِ صلى ه عليه وملم قَا َل " َل يُؤْ ِم ُن أ َ َحد ُ ُك ْم َحتَّى ي ُِحبَّ أل َ ِخي ِه‬
." ‫َما ي ُِحبُّ ِلنَ ْف ِس ِه‬
The Prophet (‫ )ﷺ‬said, "None of you will have faith till he wishes
for his (Muslim) brother what he likes for himself." (al-Bukhari)
2.4.3 Principle of Indemnity
According to Syed Mohd Ghazali Wafa Syed Adwam Wafa in Islam

everyone is required to provide security and welfare to their brothers and sisters.
In other words, everyone should give each other assurances. This assurance is
to be cherished so that if his brother is in danger he will feel it too. This can be
understood by reference to the Prophet's hadith:
22
‫ع ِن النَّبِي ِ صلى ه عليه وملم قَا َل " ْال ُمؤْ ِم ُن‬ َ ‫َع ْن أَبِي ِه أ َ ِبي ُمو‬
َ ‫مى‬
َ َ ‫شب ََّك َبيْنَ أ‬
‫صابِ ِع ِه‬ َ ‫ث ُ َّم‬." ‫ضا‬
ً ‫ضهُ بَ ْع‬ ِ َ‫ِل ْل ُمؤْ ِم ِن َك ْالبُ ْني‬
ُ َ‫ان ي‬
ُ ‫شدُّ بَ ْع‬
Narrated Abu Musa:
The Prophet (‫ )ﷺ‬said, "A believer to another believer is like a

building whose different parts enforce each other." The Prophet
(‫ )ﷺ‬then clasped his hands with the fingers interlaced. (al-
Bukhari)
2.4.4 Principles of Safety, Welfare and Protection
This principle dictates that when a person is in danger, his brothers in

faith must proactively defend him. The desire for safety, prosperity, and the
desire to seek protection are necessary. (Syed Mohd Ghazali Wafa Syed Adwam
Wafa,et. al., 2005) The Word of Allah Almighty:
ْ َ ‫الَّذِي أ‬
‫طعَ َم ُه ْم ِم ْن ُجوع َوآ َمنَ ُه ْم ِم ْن خ َْوف‬
“who has given them food against hunger, and made them safe
from danger.”
al-Quraysh (106): 4
In Islamic insurance, when it comes to security, well-being and

protection, there are two types of guarantees: individual or community members
(social security) and government guarantees. In social security, it is practiced as
a matter of sunnah and is governed by a general rule. While on the other hand,
government guarantees that the country is obligated to ensure that every citizen
has a basic right and a proper standard of living.
2.5 ROLES OF FAMILY TAKAFUL
23
Islam promotes economic well-being and the development of humanity at all
levels, individuals, families, communities, nations and peoples. This is in line with
the Maqasid Shari’ah or Shari'ah objective based on the manifestation of the
Shari'ah-based purpose, cause and well-being that brings harmony and prosperity to
the human race. Today's financial need makes Family Takaful a necessity. The need
to save and invest is part of the financial planning intended as a precautionary
measure and early preparation for disaster or accidents and this is in line with
Islamic risk management practices as advised by Islam.
The death or disability of a family breadwinner can lead to a reduction or
termination of a steady income stream, in addition to the possibility that future
income may also be affected. Therefore, the main function of Family Takaful is to
provide protection to the family to ensure continuity of income in the event of death
or disability of the income earner. Family takaful help in assisting the risk of
disability and health problems, disability risks and health problems are often
associated with high medical expenses whereby medical costs can affect overall
savings in the event of continued and long-term medical needs.
In addition, they can lead to loss and diminished income capacity if a person
destined to be disabled or has health problems may not have the same income as
before. This may be due to limitations in movements and thoughts that were not as
sharp as before. The ability to work full-time may also not be possible due to
frequent trips to hospitals or medical centers for routine treatment. These factors
will reduce one's earning potential. Moreover, takaful also hedge the old age risk, a
substantial risk of old age or longevity may result in insufficient income to cover
retirement costs such as health and medical costs, living costs and emergency needs.
Many people, on the other hand, look forward to retirement because it is a time to
relax, travel and enjoy life. Family Takaful can therefore be a long-term method for
future financial needs preparation.
Providing shelter to the family is a fundamental requirement and is also a major
requirement from the point of view of the Maqasid Shari'ah. Due to high
commitment and high house prices, buying a home often requires financial
financing. In this example, the Mortgage Reduce Term Takaful (MRTT) or
Mortgage Level Term Takaful (MLTT) is a requirement to protect the interests of
both financiers and homeowners in the event of death or disability during the
financing period. While for corporate purposes, Family Takaful under the Group
24
Family Takaful plan provides workers with various benefits to safeguard the
financial well-being of the workers. This plan is in addition to the Group Medical
and Health Takaful plan, which is part of the employee benefits provided. This can
further protect the welfare of workers improve and create healthy relationships
between employers and employees, thereby improving and promoting employee
morale and resulting in increased productivity.
2.6 SIGNIFICANTS OF HAVING FAMILY TAKAFUL
Before get to know to the significants of family takaful let us see examples of
critical illness How much do you really know about serious illnesses? For those of
us who haven't had a personal experience with critical illness, our knowledge may
be limited to dramatic images on television or a brochure handed to us. But what
does a critical illness actually mean? Let's look at three of Malaysia's most common
critical diseases and how they affect us and our wallet.
1) Cancer
Cancer is a disease caused in some part of your body by the uncontrollable

division of abnormal cells. Cancer cells can spread and form solid tissue growths
called tumors. The most common types of cancer in Malaysia are lung cancer and
nasopharyngeal (nose) cancer in males, breast and cervical cancer in females, along
with colorectal cancer that is prevalent in both sexes, according to the National
Cancer Registry Report.
Common cancer treatments include, and do not come cheap, surgery,
chemotherapy, and radiation therapy. One session of chemotherapy in a government
hospital will cost up to RM200, and a patient may have to go through any number
of sessions during their fight against cancer. The average treatment cost varies
depending on the type of cancer, it can cost lung cancer up to RM56,000 and breast
cancer up to a total of RM395,000. (Shafawi, 2019)
2) Stroke
Strokes arise when the blood flow to the brain is disrupted, allowing the brain
cells to be deprived of oxygen. When this occurs, brain cells are at risk of dying,
resulting in loss of abilities regulated by that area of the brain. Total recovery from
25
stroke is possible, but there is some form of disability left to over two-thirds of
stroke survivors. Depending on the affected area of the brain, this could be paralysis,
memory loss, or impaired speech ability. Research shows that stroke is Malaysia's
third leading cause of death, with mean age ranging from 54 to 63 years of age for
stroke patients. However, strokes can occur to anyone regardless of their age.
In a similar vein to heart attacks, stroke patients are prescribed medication and
may need to undergo surgical procedures to alleviate their condition. Brain
aneurysm and carotid artery operation can correct aneurysms (artery wall swelling)
and restore proper blood flow to the brain, and it's cost a great deal of money.
Treatment for stroke can cost anywhere from RM35,000 to RM75,000.
3) Heart attack and coronary artery disease
A heart attack is the interruption of blood supply to a part of the cardiac muscle.
When the cardiovascular artery is blocked by a blood clot, blood is usually cut off.
Coronary artery disease is an atherosclerosis-related narrowing or blocking of the
coronary arteries. Atherosclerosis is a development of cholesterol and fatty deposits
(called plaques) in the interior walls of the artery (sometimes referred to as
hardening or narrowing of the arteries). Via blood blockage or an irregular sound
and rhythm, these plaques may limit blood flow to the heart's muscle. According to
the Malaysian Department of Statistics, coronary heart disease was the leading
cause of death for male Malaysians in 2016 and the second-highest cause of death
for female Malaysians. We are at higher risk of developing this critical illness if
smoking, have high blood pressure and high blood cholesterol, and do not exercise
as a routine.
Treatment for cardiac diseases involves a wide variety of medicines designed to
reduce or expand blood pressure. In more serious cases, your heart blocking arteries
or heart bypass surgery can be performed to replace damaged heart arteries such as
a coronary angioplasty. In Malaysia, coronary angioplasty can cost you roughly
RM30,000, whereas a heart surgery will cost you up to RM70,000. The cost of these
procedures varies between institutions, but hospitals seldom show their pricing
directly on their websites.
The PruBSN Takaful therefore supports the patient financially to focus on
recovery and changes in lifestyle in the treatment of a critical disease. The PruBSN
Takaful covers a range of critical conditions for heart attack, cancer and stroke,
26
Alzheimer's, kidney disease and Parkinson's diseases, which is also common in
Malaysia. According to the 2012/2013 Protection Gap Study report by the Life
Insurance Association of Malaysia (LIAM), only 56% of people in Malaysia are
covered by life insurance / takaful.
Moreover, Depending on just one hospital referral, we may not be able to get
immediate and perfect medical care. A hospital does not have all the specialists for
every disease. Such hospitals have the advantages or strengths of their specialist
doctors. For example, Gamma Knife is one of the high-tech and safe procedures for
brain cancer. The procedure and machine are expensive and are only available at
Gleneagle Kuala Lumpur. So with the medical savings from takaful, participants are
free to find the right doctor and hospital to cure the illness. (Harmin, 2019)
27
CHAPTER THREE
RESEARCH METHODOLOGY
The methodology of research is the process of conducting research. It includes tools

and techniques for conducting a specific investigation or finding. The research method,
according to Walliman, is a set of methods used for various types of inquiry. (Walliman,
2011) Methodology is a method or process used in a particular area of study or activity
in order to collect data. It is regularly important to incorporate a thought of ideas and
speculations which underlie the methods. A few suitable methodologies were used to
achieve an “autoratatif” way in completing this research.
The methodology includes identifying risks, collecting data, research at the library and
through the internet, analyzing data.
3.1 DATA COLLECTION METHOD
For the data collection method use applied two methods of data collection techniques.
This was done in order to collect adequate and relevant data to address the research
objectives of this study. Nonetheless, data collection method used qualitative research
method.
3.1.1 Documents Analysis
Documents analysis is a method of evaluating information such as historical

records and documents. In the same way, it includes collecting data from library
resources, including textbooks, both published and unpublished scholarly reports such
as articles, conference proceedings, dissertations and theses. Research in the library also
includes information collected from internet search. In this study, one of the researcher
approach is using library as a place to obtain data and vital facts to facilitate the study.
This technique is to get the information such as the what is Takaful, history of Takaful
, the significance of having Takaful, and the dalil from al-Quran that related to the
28
family Takaful as well as the secondary sources available at the library including the
library and documentation material. This literature review is also known as a method
for materials research and evidence through documents and records. For example,
magazines, newspapers, journals, and annual reports. This will be handled by the writers
in the study to be done regarding the Prudential Bank Simpanan Nasional (BSN)
Takaful and its roles and application of medical plan.
Besides, the author have used website as one of an alternative to discover
reference and reading material. The author has utilized many websites to search for
present and latest facts regarding the study. The information obtained are general before
proceed to the interview methods. In addition, the interview technique is the technique
to get the whole facts through the official website of Prudential BSN Takaful. For
previous information especially the establishment of the Prudential BSN Takaful, its
history, achievements, and products and services in Prudential BSN Takaful. The
website that had been visit is Prudential BSN Takaful, the official site of the Prudential
BSN Takaful Berhad.
3.1.2 Interview
For this research used the method of interview. Interview the participants and
non-participants of the PruBSN Takaful to get more information about this research. It
gradually provides guidance on techniques and procedures. However, this encourages
to organize the interview by evaluating the facts that could emerge from it in order to
reach the decision. From it, we know a lot of information and gain so much knowledge
from it, and the best part is can anlayze the research so easy.
Interview method is one of the ways to obtain primary data. Primary data is
understood as data which was collected during the conduction of a particular research.
The data will be collected in the execution of an experiment. Therefore, in order to
obtain the primary information, face to face interview were employed. Will be prepared
the question for the interview, used the structured interview. In this context, the
structured interview protocols ask specific objective questions in an arranged order. In
addition, the question were all structured, planned and organized in line with the
objective of the study. This process encouraged the participants to respond to the
29
questions as accurately as possible. All involved respondents for the interview are
mentioned in the table below.
Table 3.1 : List of Respondents
Interview Profession
Faizal Bin Daud Takaful Consultant
Muhammad Faiz Bin Shafawi Takaful Consultant
Syazwan Bin Jamaluddin Takaful Consultant
Yusszaril Ghrefarre Bin Yunos Takaful Consultant (Unit Manager)
Yassir Khalifa Bin Harmin Takaful Consultant (Unit Manager)
The interview questions were designed in English language. But to ensure all
the respondents understand and respond to the questions, the interview process was also
conducted using the mother tongue of language (Malay). The responses were later
carefully transcribed and translated to English. The use of the mother of language was
used for those individuals who could not understand English thus enabling them to
contribute relevant information in relation to the topic under study.
3.2 RESEARCH DESIGN
Study design plays the crucial part of the study in this study because it involves
all four important considerations: the approach, the theoretical structure, who and what
to experiment on, and the methods and procedures to be used to collect and analyze
information. It is the important part for this research as it includes all the important
information for this research.
The research design basically is divided into several types for example
qualitative research and quantitative research. In this study, the research used qualitative
research method. Qualitative research method was developed in the social sciences to
enable researchers to study social and cultural phenomena. Basically, qualitative data
sources include observation and participation observation (fieldwork), interviews,
documents and texts, and the researcher’s impression and reactions.
For this research, method of interview are being used. The interview is a mean
to know the role of Prudential BSN Takaful in hedging medical treatment. Interviews
of the participants in the Prudential BSN Takaful is a very important method often used
30
by qualitative researchers. The rationale of using interview methods, is to enable
researcher to find out more information and knowledge regarding of this topic. This
research aims to get a bit of information received from the interviewing people that are
participate and not participate in the Takaful to know whether they have experience
admitted in the hospital, cost of the treatment and the impacts of the medical condition
to themself and their loved one.
3.3 POPULATION, RESEARCH SAMPLE AND SAMPLING METHOD
In research, Reid identified the population as all units with certain characteristics
that are of interest to researchers. (Reid, 2013) From the definition, the population can
be understood as the targeted community or group of people who is involved or selected
by the researcher for his study.
Population in a study as all units possessing certain characteristics, which are of
the interest to get the information. Population is a targeted community or a group of
people which is involved or selected by the researcher for this study. For this study, the
population is focused on the Takaful Consultant of Shazay Associates, Company under
the Prudential BSN Takaful.
In this study, the researcher employed the purposive sampling method for the
selection of the participants. Purpose sampling refers to the sample deliberately selected
according to the study's needs. This means that the researcher selects participants
because their willingness to participate in the study has been indicated. Furthermore,
this approach helps the researcher to gather relevant and useful information to address
the research question.
3.4 DATA ANALYSIS METHOD
Analysis of data is a very important research section. Review of qualitative

research data is likely to be more negative than any other particular component of the
study process. This could be attributed to the fact that information are generally
collected in the form of words, explanations, thoughts and feelings instead of numbers
in qualitative studies.
31
Data analysis is the method that most distinguishes between quantitative and
qualitative studies. Data analysis is a method by which quest can be rendered and
organized to improve their understanding of the data and to present to others what they
have found. When analyzing the results from the interview, the current research
followed the fundamental approach.
The data gathered from the interview will be arranged and summarized
according to categories as mentioned earlier “The Roles and Application of Medical
Plan in Prudential Bank Simpanan Negara Takaful” from that analysed and interpreted
the information provided by the information in accordance with the objectives of the
study.
32
CHAPTER FOUR
FINDINGS AND ANALYSIS
4.1 INTRODUCTION
In this chapter, the researcher is going to discuss the research finding. The researcher
will present it in the form of diagrams and elaboration. This chapter aims to
accomplish the two research objectives that have stated above in chapter 1. The
objectives of the research as follow:
1) To understand roles of medical plan in Prudential Bank Simpanan Negara
Takaful to the certificate holders.
2) To study the application of medical plan in Prudential Bank Simpanan
Negara Takaful certificate.
4.2 FINDINGS AND ANALYSIS
Objective one: To understand roles of medical plan in Prudential Bank Simpanan

Negara Takaful to the certificate holders.
As mentioned in Chapter one, the first research question for this study is “What is the
roles of medical plan in Prudential BSN Takaful to the certificate holders?”
From the finding, the researcher found that the Takaful Consultant in Shazay &
Associates can explain the roles of medical plan in Prudential BSN Takaful briefly. The
interviews done with the respondents have clearly explained the roles of Prudential BSN
Takaful for certificate holders.
4.2.1 Prudential Bank Simpanan Nasional (BSN) Takaful Berhad provide wealth
protection.
33
From the finding, it concludes that the Prudential Bank Simpanan Nasional
(BSN) Takaful Berhad provides a lot of benefits for their certificate holders. The benefit
of Prudential Bank Simpanan Nasional (BSN) Takaful Berhad for certificate holders is
providing wealth protection and distribution for their certificate holders. With
Prudential Bank Simpanan Nasional (BSN) Takaful Berhad, the certificate holders get
the right Takaful coverage that best protects their wealth and lifestyle. Products of
Prudential Bank Simpanan Nasional (BSN) Takaful Berhad is designed just for that.
Takaful is an Islamic concept that encompasses wealth protection and distribution and
it is currently becoming one of the important tools in wealth management business and
differs from other conventional wealth management products as it was built based on
Shariah. (Azhar, 2012) It can be articulated in conversations with the Takaful
Consultant that is:
“The majority of people will make a loan to buy something such

as a car or house. If they die, they will leave their loan behind to
their heirs. So, if they have signed up in the Takaful plan, their
heir will get compensation to settle the debts and expenses for
continuing their life. But in the matter of sickness that needed
medical treatment, the medical play major role in assisting the
cost of the treatment”
(Informant A)
“When the person have medical card, they don’t have to use their
money like their saving or borrow money from other people
because the company will paid for the treatment”
(Informant B)
“I have a client that sell flower whom get salary by day, last
week her son admitted to hospital and the medical card have
help her a lot in those critical situation”
(Informant C)
34
4.2.2 Hospitalization and Medical Treatment
Besides, the benefits of Prudential Bank Simpanan Nasional (BSN) Takaful

Berhad for the policyholder is hospitalization and medical treatment for their
policyholders. For most people, unexpected health emergencies can create an
unexpected strain on finances. The medical Takaful plan of Prudential Bank Simpanan
Nasional (BSN) Takaful Berhad pays for surgical and hospitalization costs that take
place due to illness or injury. According to Prudential Bank Simpanan Nasional (BSN)
Takaful Berhad policy (2017), many benefits that they provide under medical plan
Takaful and will be explained deeply in the second objective.
There is no denying that prevention is the best way to maintain health. However,
preparation should be provided with sufficient financial resources for health savings. In
addition, medical costs are increasing over time. Especially for critical illnesses such as
heart disease, cancer, kidney disease, stroke and so on which require high cost of
treatment. This is because, the more chronic the disease is, the greater the cost of
treatment needed, especially if the treatment has to be done overseas. Therefore, the
immediate step of saving is very important because the arrival of the disease does not
matter the time.
Therefore, participating in any Prudentia BSN Takaful product related to
medical and health protection is a wise step in the process of preparing for life's
uncertainties. As an alternative to ordinary savings, it is seen to be able to meet the
medical protection requirements as it is intended for in the event of a misfortune, the
takaful product can pay a greater benefit than the money available in the fund.
Hospital Daily Room and Board
Prudential Bank Simpanan Nasional (BSN) Takaful Berhad will reimburse the
Reasonable and Customary Charges Medically Necessary for actual room and board
incurred during Hospitalisation. Prudential Bank Simpanan Nasional (BSN) Takaful
Berhad also will pay an amount equal to the actual charges made by the hospital subject
to the maximum limit of medical coverage. For this benefit, charges incurred in a high
dependency unit (HDU) which are medically necessary will be considered s part of
Hospital Daily Room and Board benefit.
Incentive Care Unit
35
Reasonable and Customary Charges Medically Necessary for actual room and board
incurred during Hospitalisation in the Incentive Care Unit (ICU). Prudential Bank
Simpanan Nasional (BSN) Takaful Berhad will pay an amount equal to the actual
charges made by the hospital subject to a maximum of one hundred twenty (120) days.
If the period of confinement in an Incentive Unit Care (ICU) exceeds the maximum
benefits limitation, the reimbursement will be restricted to the standard Hospital Daily
Room and Board benefit. No Hospital Daily Room and Board benefit shall be paid for
the same confinement period where the Incentive Care Unit benefit is payable.
Surgical Procedure and Treatment
Reasonable and Customary Charges for the actual charges incurred for a Medically
Necessary Surgery by the Specialist, including pre-surgical assessment and post
Surgery care during Hospitalisation.
Objective two: To study the application of medical plan in Prudential Bank

Simpanan Negara Takaful.
As mentioned in Chapter one, the second research question for this study is “How does
medical plan being applied in Prudential BSN Takaful?”
Islam is a religion that embraces all aspects of human life as much as physical
health is just as much as Islam is concerned with mental and mental health care. This
is because health is a very valuable gift and should be appreciated.
Of course, preventing it is better than cure. Therefore, Islam teaches us to take
good care by taking precautionary measures before any illness. However, when it comes
to Islamic disease it also teaches us not to despair and to seek the cure because every
disease has its remedy, as the Messenger of Allah said:
َ ‫ع ْن أ َ ِبي ُه َري َْرة َ ـ رضى ه عنه ـ‬

‫ع ِن النَّ ِبي ِ صلى ه عليه وملم‬ َ
." ‫َّللاُ دَا ًء ِإَلَّ أ َ ْنزَ َل لَهُ ِشفَا ًء‬
َّ ‫قَا َل " َما أ َ ْنزَ َل‬
Narrated Abu Huraira:
The Prophet (‫ )ﷺ‬said, "There is no disease that Allah has created,

except that He also has created its treatment."
36
(al-Bukhari)
4.2.3 Medical Plan Of Prudential BSN Takaful
From a conceptual point of view, family takaful protection plans are similar to
conventional life insurance. The Family Takaful Plan is a long-term savings and
assistance program for the protection of individuals and groups that provide mutual
assistance in the event of death and total permanent disability to the participants.
Various side benefits can be combined with Family Takaful Plans such as personal
accident protection, hospital benefits, long-term permanent disability coverage and
family health benefits.
Generally, there are two types of protection plans in Prudentia BSN Takaful,
namely Family Takaful Plan and General Takaful Plan. The Family Takaful Plan is
divided into two, the Individual Family Takaful Plan and the Group Family Takaful
Plan. However, this study focuses only on the medical plan which is supplemental
benefit plan (Rider) under Individual Family Takaful Plan which consists of the Basic
Plan as well as the Supplemental Benefit Plan (Rider). In this section, the author will
elaborate on these medical plan which covers the benefits of the product as well as the
terms and conditions associated with it.
Based on the data collected, the informants proved that the medical plan at
Prudential Bank Simpanan Nasional (BSN) Takaful Berhad has been applied effectively
and efficiently. Prudential Bank Simpanan Nasional (BSN) Takaful Berhad provide
various kind of products for their customers. Prudential Bank Simpanan Nasional
(BSN) Takaful Berhad provides the plan for the participants of the Takaful plan with
the ability to adjust the amount and type of Takaful coverage required to provide
investment returns to their participants.
Based on analysis of the Prudential Bank Simpanan Nasional (BSN) Takaful
Berhad certificates, there are two types of medical plan in the Prudential BSN Takaful
Tradional plan and Investment-Linked plan, It can be articulated in conversations with
the Takaful Consultant that is:
“There are two types of medical plan in Prudential BSN Takaful.
The first one is Traditional products that’s doesn’thave cash
37
value and Investment-linked products which does have cash value
and it is to sustain the account in the future.”
(Informant A)
“In Prudential BSN Takaful, there are two products of medical

which is HealthProtector and MedicProtector. The products
variety based on customers need, MedicProtector is focused on
the person who mainly priority is on medical”
(Informant B)
“Basically the medical plan in Takaful is rider which mean

additional benefit, the main purpose of Takaful is to help the
participants in the event of death and Total Permanent Disability
(TPD), there are two products of Prudential BSN Takaful
provided the medical plan, which is AnugerahPlus and AsasLink
or Setia, both products have medical plan rider.”
(Informant C)
Basic Plan
In the Prudential BSN Takaful, the medical plan is a rider under the basic plan
of the Prudential BSN Takaful products which is AnugerahPlus and Setia, the basic plan
provide protection plan in the event of death and total permanent disability which
Prudential BSN takaful will give sum of covered in case of death and total permanent
disability.
PruBSN Setia Medical Plan (HealthProtector)
Healthcare is very important and the need for healthcare is becoming more important
as we get older. With the rising cost of health care, have you ever thought that you
would be prepared to take care of yourself in the event of unforeseen circumstances and
if your savings were insufficient to meet medical needs? HealthProtector have a medical
plan that not only guarantees your medical needs but also helps you save money along
with other benefits. HealthProtector offers:
1. Room and Board benefit:
38
Daily Hospital Rooms & Accommodations (up to 150 days a year, flexible choices of
between RM100, RM200, RM300, RM400, RM500 and RM600 per day (Increase in
multiples of RM100 per day).
2. Hospital & surgical benefit:
Payment as charged of Intensive Care Unit / Cardiac Care Unit (up to 90 days a year).
It is also included Hospital & Related Services such as Surgical Benefits, Hospital
Supplies and Services, Surgical Rooms , Anesthesia Payments, Inpatient Physician
Visits (limited to 2 visits per day).
3. Outpatient Treatment benefit:
It is a payment as charged of pre-hospital treatment (within 60 days before

hospitalization) after-hospital treatment (within 90 days after hospitalization) care by
home nurses (up to 180 days for life) daily care and surgery surgery. For the outpatient
cancer treatment outpatient kidney dialysis, there are up to 1.5 times the Smart Value
Point selected.
4. Maternity Complications benefit:
There is also maternity complications benefit for female covered person, which is up to
RM5,000 per year.
5. Intraocular Lens benefit:
Intraocular lens is a lens implanted in the eye as part of a treatment for cataracts or
myopia. HealthProtector provide benefit of up to RM6,000 per lifetime.
6. Emergency Treatment For Accidental Injury benefit:
For Emergency Treatment For Accidental Injury, the benefit is up to 10 times of

Hospital Daily Room and Board amount per year.
7. Emergency Medical Assistance and Second Medical Opinion benefit:
Under his plan, there is also Emergency Medical Assistance benefit provided and for
Second Medical Opinion which is Consultation and Diagnosis in Malaysia or
Consultation with World Leading Experts, benefit RM1,000 per year is given.
39
Smart Value Point: RM1 million, RM1.5 million or RM2 million
Claims of eligible benefits will be paid in full (subject to SmartSaver300 or High

Deductible, if applicable, will be explained later) until the initial Smart Value Point. If
the amount of the claim exceeds the initial Smart Value Point plus the accumulated
Smart Value Point Bonus, we will continue to cover up to the expiration date by paying
80% of the total benefit cost. Outpatient Cancer Treatment Benefits and Outpatient
Kidney Dialysis are up to 1.5 times the Smart Value Point selected. When the number
of claims eligible for Outpatient Cancer Treatment and Outpatient Dialysis Surgery
exceeds this limit, no further claim can be made under the Outpatient Cancer Treatment
Benefit and Outpatient Dialysis. Claims on Benefits of Outpatient Cancer Treatment
and Outpatient Kidney Dialysis will be considered as part of the Smart Value Point.
How does Smart Value Point work?
For example, a 35-year-old male customer has joined HealthProtector with a SVP of
RM1.5 million and has a total claim worth RM2 million.
Total Claimed: RM 2,000,000
RM 1,500,000 RM 500,000
100% paid by RM400,000 by RM100,000 by

HealthProtector HealthProtector participant
HealthProtector HealthProtector
Figure 4.1 : The application of Smart Value Point if the usage is exceeded
Smart Value Point Bonus
For plans with a RM300 Daily Room Room & Accommodation benefit, if participants
do not make any claim within 2 years, participants will be rewarded with a Smart Value
Point Bonus by increasing your Smart Value Point (SVP) by 2% of SVP beginning at
the end of every 2 years. When the amount of claim paid exceeds the amount of Smart
Value Point as well as the accumulated Smart Value Point (if any), no further Smart
Value Point Bonus will be offered despite no further claim.
Choice with medical payment: High Deductible and Smartsaver300
High Deductible
40
High Deductible is for the participants that already have medical coverage but there is
limit of the coverage per year. High deductible is the participants must pay the fixed
amount equal to the deductible selected from the accumulated amount of benefits
payable during the year, before PruBSN pays the remaining expenses. The accumulated
amount of benefits payable that year will not be carried over to the following year. If
you already have a medical plan with an annual limit equal to (or higher than) the
deductible amount, eligible expenses that exceed the selected High Deductible value
will be covered by HealthProtector. High Deductible applies to Room &
Accommodation Benefits, Hospital and Surgical Benefits, Outpatient Treatment
Benefits, and Other Benefits except Secondary Medical Opinion and Medical
Emergency Assistance.
Smartsaver300
The SmartSaver300 is a way to maximize the value of medical plan. With

SmartSaver300, participants only have to pay RM300 in advance from the amount of
common and reasonable charges from eligible entitlements for any disability. The
SmartSaver300 gives participants the flexibility to enjoy cost savings where these
savings can be used to improve participants’s level of protection and retirement funds.
The participants can get more savings with higher cash value, more protection and more
benefits with the SmartSaver300 medical plan compared to full protection.
If participants choose SmartSaver300, they must pay a fixed amount of RM300 in

advance of the eligible benefits before HealthProtector pays for any expenses that do
not include the cost of Daily Hospital Room & Accommodation, Daily Surgery, Day
Care Procedures, Outpatient Cancer Treatment, Outpatient Kidney Dialysis ,
Emergency Treatment for Accidental Injuries, Secondary Medical Opinions,
Emergency Medical Assistance and Intraocular Lenses for any disability.
Entry age of the HealthProtector and Maturity
The age of admission can be apply as 14 weeks of pregnancy up to 70 years. Moreover

the maturity or benefit periods can be choose to be protected up to the age of 60, 70, 80,
90 or 100, or for a period of 20 years. The Options are based on the age of admission of
a covered person with a minimum benefit period of not less than 20 years. The Benefit
Period for HealthProtector must be the same as the Benefit Duration for the basic plan.
41
Waiting Period
When the participants apply for the medical plan, it cannot be used immediately unless
in case of accident, there are waiting period that need to be look on which is the
eligibility for the benefits under the certificate will only start after the waiting periods
below from the effective date of the certificate. For specified covered illnesses is 120
days, all other covered illnesses is 30 days, maternity complications is 365 days and
hospitalisation due to accidents is covered immediately.
PruBSN Anugerah Plus Medical Plan (MedicProtector)
There is no denying that medical care is becoming more sophisticated and fast, but the
costs of medical care and services are rising. Realizing how much healthcare costs
today, Medic Protector can be a medical plan that can help us when we need it most.
Medic Protector is a medical protection plan that you can have to protect ourself and
our family from unforeseen event. MedicProtector offers 4 types of plan which is Plan
150, Plan 200, Plan 300 and Plan 400 (Prudential BSN Takaful, 2019). For detailed,
MedicProtector offers:
1. Room and Board benefit:
For Daily Hospital Rooms & Accommodations up to 150 days a year for Plan 300 and
Plan 400, but for the Plan 150 and Plan 200 up to 120 days per year. There is flexible
choices of between RM150, RM200, RM300 and RM400 per day. For Hospitalize such
as Intensive Care Unit (max 120 days per annum), Surgical Procedure and Treatment
In-hospital and Related Services is paid as charged
2. Outpatient Treatment benefit:
This benefit pays as charged for daily surgery,and for home nursing care it is only
applicable to plan 300 and plan 400 and Maximum Home Nursing Care Days (per
lifetime) is 180 days for and it is also paid as charged for Pre-hospitalisation and Post-
hospitalisation Treatment (within 120 days before and after hospitalisation).
3. Cancer and Kidney Dialysis Outpatient Treatment:
There is an allocation treatment for cancer and kidney dialysis treatment which is for
Plan 150 is RM750,000 per lifetime, RM1,000,000 per lifetime for Plan 200, for Plan
300 is RM1,500,000 per lifetime and RM2,000,000 per lifetime for Plan 400.
42
4. Treatment Allowance Benefit:
The Treatment Allowance benefit is for Chemotherapy, Radiotherapy, Kidney Dialysis,

Heart Attack Follow-up Care which is RM100 per day, maximum RM1,000 per year
and RM10,000 per lifetime.
5. Second Medical Opinion:
For second medical opinion is for Consultation and Diagnosis in Malaysia or

Consultation with World Leading Experts with RM500 benefit per year and only
applicable to Plan 400.
6. Additional Lifetime Limit for Organ Transplant:
There is an added lifetime limit RM100,000 for organ transplant and only applicable to
Plan 300 and Plan 400.
7. Maternity Complications benefit:
Maternity complications benefit is only applicable to Plan 300 and Plan 400 which is
benefit RM6,000 per year for Plan 300 and RM10,000 per year for Plan 400.
8. Emergency Treatment for Accidental Injury benefit:
Benefit for emergency treatment for accidental injury is RM1,500 per year for Plan 150
and Plan 200, while RM2,000 per year for Plan 300 and RM3,000 per year for Plan 400.
9. Worldwide Emergency Medical Assistance:
Worldwide coverage is for Covered Persons who travel/reside outside of Malaysia

(overseas residence) not more than 90 days per year. Worldwide Emergency Medical
Assistance is a complimentary service provided by a third party provider with 24-hour
Line and can be terminated by giving 14 calendar days prior notice to you and it is
applicable to all plan under MedicProtector.
10. Additional Annual Limit due to Cancer, Heart Attack or Kidney Failure benefit:
There is additional limit due to cancer, heart attack or kidney failure, which is additional
RM150,000 for Plan 150, additional RM200,000 for Plan 200, additional RM300,000
for Plan 300 and additional RM400,000 for Plan 400.
11. Hajj/Umrah immunization benefit:
43
For the Plan 200, Plan 300 and Plan 400 there is hajj and umrah immunization benefit
which is RM300 for every 3 years.
12. Government Hospital Benefit:
Under MedicProtector plan there is also compensation paid if admitted to the

government hospital for Plan 150, the benefit is RM50 per day, for Plan 200, RM100
per day. Moreover RM150 per day for Plan 300 and RM200 per day for Plan 400.
Annual Limit and MedicBooster
There is no lifetime limit for MedicProtector but there is annual limit to it which is
according to the plan which are RM150,000 per year for Plan 150, RM200,000 per year
for Plan 200, RM300,000 per year for Plan 300 and RM400,000 per year for Plan 400.
MedicBooster is an additional benefit that will increase participants’s Annual Limit in
MedicProtector by an additional RM1,000,000. In addition, the Medic Booster will also
double the Lifetime Limit of Outpatient for Cancer and Kidney Dialysis Treatment for
each MedicProtector plan. Therefore, with Medic Booster, our concerns about future
medical costs can be eliminated.
Smartsaver300
The SmartSaver300 is a way to maximize the value of the medical plan. Selecting the
SmartSaver300 allows the participants to save their annual contribution against the Full
Protection option. With that contribution, the participants can improve protection. With
SmartSaver300, they must pay only RM300 of the total Reasonable and Customary
Charges of eligible benefits for any one disability.
Entry age of the MedicProtector and Maturity
The age of admission can be apply as 1 year up to 70 years age next birthday. Moreover
the maturity or benefit periods can be choose to be protected for 5, 10, 20 years or up
to 70 year or 100 years. The Options are based on the age of admission of a covered
person with a minimum benefit period of not less than 5 years. The Benefit Period for
MedicProtector must be the same as the Benefit Duration for the basic plan.
Waiting Period
When the participants apply for the medical plan, it cannot be used immediately unless
in case of accident, there are waiting period that need to be look on which is the
44
eligibility for the benefits under the certificate will only start after the waiting periods
below from the effective date of the certificate. For specified covered illnesses is 120
days, all other covered illnesses is 30 days, maternity complications is 365 days and
hospitalisation due to accidents is covered immediately.
The major exclusion of the certificate
1. Suicide if death was due to suicide within year from the effective date of certificate
or the date of certificate revival, whichever is later, the cash one value of the
certificate at the valuation date after the date of notification shall be payable.
2. Total and permanent disability benefit is not payable if the disability is directly or
indirectly caused by:
a) attempted suicide or self-inflicted injuries while sane or insane; or
b) committing or attempting to commit a criminal offence by the Covered Person;
or
c) drugs or stimulators abuse, or their complications; or
d) war or aggressive acts, including invations, acts of foreign countries, enemy's
acts (whether with or without war declaration), civil wars, insurrections,
revolutions, riots, interference by military authorities or usurpation; or
e) engaging in professional sports, scuba diving, racing of any kind, aerial flights
other than as a crew member of or as a fare-paying passenger on a licensed
passenger-carrying commercial aircraft operating on a regular scheduled route
or any dangerous activities or sports (including bungee jumping, hang-gliding,
ballooning, parachuting and sky-diving), unless we agree in a special
endorsement; or
f) any pre-existing conditions that were not disclosed to us in relation to the
Covered Person's health status. This is applicable within 12 months from the
date the certificate becomes effective. Any pre-existing conditions that were not
disclosed to us after the 12 months will be handled in accordance with Schedule
9 of the Islamic Financial Services Act 2013; or
g) any congenital disorder, birth trauma and its residual complications, for a
certificate or Annex approved while the Covered Person is still in the womb.
Other exclusion
Based on the interviews from the Takaful consultant at Shazay Associates, the
exclusion using medical plan usually because of the medical report from doctor that
45
described the condition of the patient doesn’t need admission to the hospital and be
treated as outpatient. The doctor’s report played major role in determine the
authorization of Pre-authorization Letter (PAL). (Yunos, 2019)
Moreover, the pre-existing condition of the client that not declared will also
become the issue. So, client need to honest in declaring all the pre-existing condition
that they have. It is also the one of principles in Takaful which is utmost good faith
which mean that every person in contract of Takaful has a legal obligation to follow
this principle towards the company (Jamaluddin, 2019).
Besides, client that has been lapsed is not eligible to get any benefits under the
Takaful plan that they sign up. According to Prudential Bank Simpanan Nasional
(BSN) Takaful Berhad (2017), the certificate or policy will lapse if there is
insufficient units in Protection Unit Account (PUA) and Investment Unit Account
(IUA) if any to pay for the Tabarru’ deduction for the basic plan and additional
benefits. Additional benefits (if any) will also expire upon non-payment of the
contribution if there is no consent given to subtract the Tabarru's deduction for
additional benefits, although the Protection Unit Account (PUA) is appropriate. It
has been confirmed by questioning informants and analyzing the advantages of
Takaful Berhad policies for policyholders by Prudential Bank Simpanan Nasional
(BSN) :
“Basically when the Pre-authorization Letter (PAL) are not
authorized, in my experience, it is because clients does not
declare the pre-existing diseases that they already have, the client
and agent need to be honest in providing information”
(Informant A)
“In many case, when the PAL is not authorized, it is because of

the pre-existing condition that doesn’t declare. Moreover, the
approved of PAL rely on doctor’s report regarding the condition
of the patient”
(Informant B)
“The usage of medical card is only for emergency and only

when needed, client cannot treat the medical card same as
46
credit card because medical card is as tool for risk
management”
(Informant C)
47
CHAPTER FIVE
RECOMMENDATION AND CONCLUSION
5.1 INTRODUCTION
In this chapter, the researcher has concluded that result getting from the current
research and a bit discussion about the result. Besides, this section also discussion about
several recommendations for future research and some suggestion to make it get a better
result for the findings.
5.2 RECOMMENDATION
As the research conducted above, the researcher has concluded that the
application of medical plan in Takaful played crucial roles. All companies of the
Takaful industry especially Prudential Bank Simpanan Nasional (BSN) Takaful Berhad
must ensure the involvement of the community especially Muslims to contribute to
Takaful. This is because as the involvement of the community in Takaful increases, the
Tabarru’ fund also will increase hence can give more benefits in the medical plan.
Indirectly, it will help more people to manage the risks that they might face in their
daily life. Some recommendations are proposed for increasing the involvement of
society in Takaful.
5.2.1 Education
To increase someone’s knowledge about the roles and application of medical

plan as applicable in the Takaful system, early education is very crucial. Education at
an early age such as in secondary school about the roles of medical plan might increase
their knowledge and perception towards the concept of Takaful. Not just that, a syllabus
about Takaful or insurance also need to be highlighted in higher education level such as
48
diploma and degree because they will be exposed to the working environment after they
end their studies. Hence, after they get a job, they will consider contributing to the
Takaful plan because they realize that Takaful is just not provided benefits for
themselves but to other people also.
5.2.2 Promotion
Promotion is the best way to increase sales and attract more people to certain
things. In this case, Prudential Bank Simpanan Nasional (BSN) Takaful Berhad itself
needs to increase the promotion in all social media because we can say that everyone
has their own social media account nowadays. The promotion needs to be attractive,
clear and can give them a sort of awareness through the promotion of such short story.
5.2.3 Approaching Activity By The Agents
Approaching activity is very important to increase people’s knowledge about

the roles of medical plan as applied in Prudential Bank Simpanan Nasional (BSN)
Takaful Berhad certificates. Sometimes, they have no idea about the medical plan
concepts applicable in Prudential Bank Simpanan Nasional (BSN) Takaful Berhad
certificates, how it helps the people in need and they did not have time to take a note
about thismatter. Thus, approaching activity in their workplace or whenever they free
is very essential to increase their knowledge.
5.3 CONCLUSION
This research discusses the rolesand application of medical plan in Prudential

Bank Simpanan Nasional (BSN) Takaful Berhad certificates. Through this research,
there are two objectives of this research. Firstly, to study the roles of medical plan of
the Prudential Bank Simpanan Nasional (BSN) Takaful Berhad to the certificate
49
holders. Secondly, to analyze the application of medical plan as practiced in Prudential
Bank Simpanan Nasional (BSN) Takaful Berhad.
Also, the probability of threats and accidents is open to everyone.
Notwithstanding all this, Muslims believe in Qadha and Qadr, but Islam needs one to
find ways and means to keep away from such troubles and adversities whenever such
things happen, and one should try to minimize financial losses to one's or one's friends.
One way out is to purchase a Takaful cover.
Islam provides a solution for the implementation of the insurance system that
follows the Shariah principle. Tabarru’s contract is introduced as it is practical and
more secure. Each participant in a Takaful program allocates some of their donations to
be donated to help other participants in the event of calamities. It should be emphasized
here that the benefits of this definition are not unique to Muslims alone, but also provide
benefits to all participants regardless of their religious belief, ranks or status and
emphasis on profit sharing and charity.
Tabarru’ is classified as a one-sided contract that does not require any exchange
or return that existed in an exchange contract such as buying and selling contracts which
determines the existence of an exchange between two parties involved in a contract. A
person who donates only has to hand over to the relevant parties the items to be donated
and his contract is considered completed. In fact, in this case, there is no such thing as
money loss as misinterpreted by some parties because it is the money of the gift that
Allah would reward.
The medical inflation that occurs in Malaysia and one of the highest medical
inflation the world can be help by contributing in Takaful. It can make sure the
certificates holder are in peace of mind about the cost of treatment when unfortunate
incident occurs which rely on medical treatment. Moreover, when vast amount of
people contribute in the Tabarru’ fund, it can increase the amount of capital in there and
can guarantee more benefits to the participants of the takaful and can help among them
when unfortunate things happen.
God promises the practice of giving and helping each other for good cause alms
with immense rewards. Tabarru’s activity in the Takaful system is called a donation of
the first class because it is done honestly so that a left-hand person does not know what
his right hand has given and it was based on the spirit of thought fraternity. Participants
will concurrently reap the universe and the future incentives and these are among the
50
advantages and elegance of the Takaful model that was missing in the traditional
insurance system.
It can be concluded that the medical plan help the participants a lot when it
comes to medical treatment. The Takaful practice allows us to enjoy the special rewards
given by Allah S.W.T As the Takaful customer, employee or representative (agent), the
chances for us to seize this opportunity are widely opened. Hopefully, the portion of our
wealth that we assign as a Takaful donation will become proof of Allah's blessed
blessings.
51
BIBLIOGRAPHY
al-Bukhari. (n.d.). Sahih al-Bukhari. Beirut: Dar al-Fikr.
Azhar, A. (2012). Takaful As a Risk Management Tool in Islamic Estate Planning.

Journal of Business Management and Accounting, II.
Bank Negara Malaysia. (n.d.). Licensed Insurance Companies & Takaful Operators:
Bank Negara Malaysia. Retrieved from Bank Negara Malaysia Web Site:
http://www.bnm.gov.my/index.php?ch=li&cat=insurance&type=TKF&fund=0
&cu=0
Cambridge Dictionary. (n.d.). Retrieved from Cambridge Dictionary Web Site:

https://dictionary.cambridge.org/dictionary/english/medical
Daud, F. (17 December, 2019). The roles and application of medical plan in PruBSN
Takaful. (M. Othman, Interviewer)
Gustina, & Abdullah, N. I. (2012). Analysis of Demand for Family Takaful and Life.
Journal of Islamic Economics, Banking, and Finance.
Habib, F., & Shaukat, M. (2016). Shariah Appraisal of the Takaful Model based on
Tabarru' (Donation). Journal of Islamic Banking and Finance, 63-81.
Harmin, Y. K. (25 December, 2019). The roles and application of medical plan in
PruBSN Takaful. (M. F. Othman, Interviewer)
IBFIM. (2018). Buku Teks Peperiksaan Asas Takaful. Islamic Banking & Finance
Institute Malaysia.
ISRA. (2011). Islamic Financial System: Principles and Operation (2nd ed.).
International Shariah Research Academy for Islamic Finance.
Jamaluddin, S. B. (17 December, 2019). The roles and application of medical plan in
Lin, W. E. (17 August, 2017). Malaysia’s medical inflation at double-digit pace.

Retrieved from The Edge Markets Web Site:
https://www.theedgemarkets.com/article/malaysias-medical-inflation-
doubledigit-pace
52
Prudential. (n.d.). About Prudential Malaysia: Prudential. Retrieved from Prudential:
https://www.prudential.com.my/en/our-company/about-prudential-malaysia/
Prudential BSN Takaful. (2019). Prudential BSN Takaful Anugerah Plus Certificate.
Prudential BSN Takaful. (2019). Prudential BSN Takaful HealthProtector Brochure.
Prudential BSN Takaful. (2019). Prudential BSN Takaful MedicProtector Brochure.
Prudential BSN Takaful. (2019). Prudential BSN Takaful Setia Certificate.
Prudential BSN Takaful. (n.d.). Company Profile: Prudential BSN Takaful. Retrieved
from Prudential BSN Takaful Web site: https://www.prubsn.com.my/en/our-
company/our-brand/company-profile/
Rabi' Mahmud al-Rubi. (1998). al-Takaful al-Ijti a‘i fi al-Qur'an al-Karim: Tahlil
Iqtisadi wa Fiqhi . Kaherah: Markaz Salih ‘Abd Allah Kamil.
Rabiah Adawiah Engku Ali. (2008). Essential Guide to Takaful (Islamic Insurance).
Kuala Lumpur: CERT Publications Sdn. Bhd. .
Redzuan, H. (2006). Prinsip Pengurusan Risiko dan Insurans. Selangor: Prentice Hall
Malaysia Sdn. Bhd.
Reid, H. M. (2013). Introduction to Statistic. California: SAGE Publications Inc.
Shafawi, M. F. (17 December, 2019). The roles and application of medical plan in
Syed Mohd Ghazali Wafa Syed Adwam Wafa,et. al. (2005). Pengantar Perniagaan
Islam. Kuala Lumpur: Pearson Malaysia Sdn. Bhd.
The Star. (25 January, 2019). Heart disease ‘leading cause of death’. Retrieved from
The Star Online Web SIte:
https://www.thestar.com.my/news/nation/2019/01/25/heart-disease-leading-
cause-of-death
The Star. (4 March, 2019). Life insurance records moderate growth in 2018.
Retrieved from The Star Online Web Site:
https://www.thestar.com.my/business/business-news/2019/03/04/life-
insurance-records-moderate-growth-in-2018
53
Walliman, N. (2011). Research Methods The Basics. New York: Routledge.
Yunos, Y. G. (24 December, 2019). The roles and application of medical plan in
Zamani Abdul Ghani, Z. A. (2006). Official Launch of Commerce Takaful Berhad .

Kuala Lumpur.
54

The Roles and Application of Medical Plan in Prubsn Takaful

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The Roles and Application of Medical Plan in Prubsn Takaful

Uploaded by

Copyright:

Available Formats

UNIVERSITI TEKNOLOGI MARA

THE ROLES AND APPLICATION OF MEDICAL

MUHAMMAD FAKRI BIN OTHMAN

THE ROLES AND APPLICATION OF MEDICAL

MUHAMMAD FAKRI BIN OTHMAN

Academic Writing submitted in partial fulfilment of the

Bachelor in Muamalat (Hons.)

Academy of Contemporary Islamic Studies

Mohammad Mahyuddin Khalid, MA

Mohd Hafiz Abdul Wahab, MA

NURHIDAYAH HASHIM, PhD

Name of Student : Muhammad Fakri Bin Othman

Signature of Student : …………………………………………….

Next, my appreciation and thanks go to my supervisor Mr. Mohammad Mahyuddin

Furthermore, I would like to give all my thankfulness and appreciation to my parents,

CONFIRMATION BY PANEL OF EXAMINERS ................................................... i

CHAPTER ONE: INTRODUCTION ........................................................................ 1

CHAPTER TWO: LITERATURE REVIEW ......................................................... 10

CHAPTER THREE: RESEARCH METHODOLOGY ........................................ 28

CHAPTER FOUR: FINDINGS AND ANALYSIS ................................................. 33

CHAPTER FIVE: RECOMMENDATION AND CONCLUSION ....................... 48

Tables Title Page

Figures Title Page

BSN Bank Simpanan Nasional

1.1 INTRODUCTION OF TAKAFUL

1.2 BACKGROUND OF STUDY

1.3 BACKGROUND OF COMPANY

Prudential Assurance Malaysia Berhad (PAMB) was established in

1.4 PROBLEM STATEMENT

1.5 RESEARCH OBJECTIVE

1.6 RESEARCH QUESTIONS

In seeking objectives of study, the following questions were highlighted to be

1.7 SIGNIFICANCE OF STUDY

This research important:

1.8 SCOPE OF STUDY

This study is conducted on the roles and application of medical plan in

1.9 LIMITATION OF STUDY

1.9 DEFINITION OF TERMS

2.1 DEFINITION OF FAMILY TAKAFUL

Takaful's global contribution would increase by 31 percent to USD 12 billion in

Figure 2.1: The allocation of takaful contribution

2.2 HISTORY OF TAKAFUL

Takaful Malaysia Bhd. (STMB) is incorporated.

1993 MNI-Takaful Sdn. Bhd. started operating.

1995 Establishment of ASEAN Takaful Group.

1997 The establishment of ASEAN Retakaful International (L) Ltd. based at

the International Offshore Financial Center, Labuan.

Appointment of members - National Sharī'ah Advisory Council for

Islamic Banking and Takaful.

1998 MNI-Takaful changed its name to Takaful Nasional Sdn. Bhd.

2000 STMB and National Takaful (now known as Etiqa

Takaful) jointly develop the Code of Ethics for the industry.

2001 Establishment of IBFIM.

BNM launches the Financial Sector Masterplan.

2002 Mayban Takaful Bhd. started operating.

The establishment of the Malaysian Takaful Association.

Islamic Financial Services Board -IFSB was inaugurated.

2003 Takaful Ikhlas Bhd. started operating.

run Takaful business.

Hong Leong MSIG Takaful, Prudential BSN Takaful commenced

2006 Establishment of the International Financial Center of Malaysia.

2008-2010 Establishment of Four Retakaful Operators: ACR Retakaful Bhd,