HAND-OUT: TAKAFUL

Insurance products are mainly of two categories: life insurance and general insurance.
The latter has three main branches: marine, fire and accident (as in the case of motor vehicles, aeroplanes,
etc.);
Life insurance is broadly classified into whole life policies and endowment policies.
While whole life policies promise the face value of the policy whenever the insured dies, endowment
policies are confined to limited periods.
Things happen by Allah’s will so there is no need to manage risk
Traditional Insurance involves Gharar, Riba and Maisir, hence it is forbidden.
Shariah basis of Takaful
1. Qasamah
2. Mawalat
3. Aqilah
4. Tabarru
5. Waqf
There are three kinds of Waqf in Islamic jurisprudence:
Religious Waqf, Philanthropic Waqf and Family Waqf.

Waqf becomes a separate entity, which has the ability to accept or transfer ownership. The ownership of the
Waqf property is transferred from the person creating the Waqf forever. Waqf property cannot be sold; only
the usufruct is assigned to the beneficiaries. According to the Waqf principles, a member (donor) can also
benefit from the Waqf. The beneficiaries of the Waqf in Takaful arrangements are
the creator of the Waqf and the group whose members contribute for the purpose of mutual help and
covering the losses to any of them.

NAV basis= Net asset value basis

QasAmah literally means “taking an oath,” but in the terminology of the Shari'ah, it is an oath of a
particular type and taken under particular conditions.
Qasamah [oath for investigating murder]

Qiṣāṣ (Arabic: ‫ )قصاص‬is an Islamic term meaning "retaliation in kind", "eye for an eye", or retributive
justice. In traditional Islamic law (Sharia), the doctrine of qisas provides for a punishment analogous to the
crime. Qisas is available to the victim or victim's heirs against a convicted perpetrator of murder or
intentional bodily injury. In the case of murder, qisas gives the right to take the life of the killer, if the latter
is convicted and the court approves. Those who are entitled to qisas have the option of receiving monetary
compensation (diyya) or granting pardon to the perpetrator instead.
Qisas is one of several forms of punishment in traditional Islamic criminal jurisprudence, the others
being Hudud and Ta'zir. The legal systems of Iran, Pakistan, Saudi Arabia and some Nigerian states
currently provide for qisas.

 Hadd (literally "limit") under Sharia, are rules stated in the Quran and the Hadiths, and whose
violation is deemed in Islam as a crime against God, and requires a fixed punishment. Hadd crimes
include theft, illicit sexual relations or rape, making unproven accusations of illicit sex, drinking
intoxicants like alcohol, apostasy, and highway robbery.
Handout: Takaful Dr. Humaira Asad 9 September 2020
 Qisas, (literally "retaliation in kind"[10]) and diyya, ‫"( )دية‬blood money"), in Islamic jurisprudence, are
the second category of crimes, where Sharia specifies equal retaliation (qisas) or monetary
compensation (diyya), as a possible punishment. Included in this category is homicide, for example,
which Islamic law treats as a civil dispute between believers. Qisas principle is available against the
accused, to the victim or victim's heirs, when a Muslim is murdered, suffers bodily injury or suffers
property damage. In the case of murder, qisas means the right of a murder victim's nearest relative
or wali (‫( )ولي‬legal guardian) to, if the court approves, take the life of the killer.
 Tazir (literally "to punish", sometimes spelled as taazir, ti'zar, tazar, ta'azar) is the third category, and
refers to offense mentioned in the Quran or the Hadiths, but where neither the Quran nor the Hadiths
specify a punishment. In Tazir cases, the punishment is at the discretion of the state, the ruler, or
a qadi (kadi), or court acting on behalf of the ruler. Tazir punishment is for actions which are considered
sinful in Islam, undermine the Muslim community, or a threaten public order during Islamic rule, but
those that are not punishable as hadd or qisas crimes. The legal restrictions on the exercise of that power
are not specified in the Quran or the Hadiths, and vary. Crimes punished by tazir also require proof that
hadd or qisas crimes require. The judge enjoys considerable leeway in deciding an appropriate form of
punishment, and the punishment does not have to be consistent across the accused persons or over time.
The ruler or qadi also has the discretion to forgive tazir offenses.[5]
Exonerate: acquit; clear;
Definition of bloodwite. 1 early English law. a(1) : a fine or amercement for the shedding of blood payable
to the king, lord, or other superior in compensation for the breach of his peace — compare wergild. (2) : a
penalty for murder. b(1) : the right to levy such a fine.
“Al-Qisaas (the Law of Equality in punishment) is prescribed for you in case of murder”

[al-Baqarah 2:178] 

“And there is (a saving of) life for you in Al-Qisaas” [al-Baqarah 2:179]

What is meant – and Allaah knows best – is that the requirement of qisaas deters the one who wants
to kill from doing do, out of compassion towards himself so that he will not killed, and so that the one
whom he wanted to kill will remain alive. And it was said that the killer would generate enmity
between himself and the tribe of the one whom he killed, so he wants to kill them for fear of them and
they want to kill him and his tribe in revenge. If he is executed as a punishment according to
sharee’ah, that will prevent the reason for fighting between the two tribes. And Allaah says
(interpretation of the meaning): 

“And We ordained therein for them: Life for life, eye for eye” [al-Maa’idah 5:45].

The Prophet (peace and blessings of Allaah be upon him) said: “If a person’s relative is killed, he has
the choice of two options: either (the killer) may be killed or the fidyah (ransom, blood money) may be
paid.” Agreed upon. Abu Shurayh al-Khuzaa’i said: The Messenger of Allaah (peace and blessings of
Allaah be upon him) said: “Whoever is killed or is wounded, has the choice of three things, and if he
wants the fourth then restrain him. He may kill (the killer), or forgive him, or take the diyah (blood
money). Narrated by Abu Dawood. According to another version: “Whoever has a relative killed after
what I have said, his family has two options: to accept the diyah or kill (the killer).” And he (peace
and blessings of Allaah be upon him) said: “There is qisaas for deliberate killing, unless the heir of the
slain lets him off.” End quote. 

There was no difference of opinion among the scholars that it is valid for the heirs of the victim to
forego qisaas and accept the diyah. This is what is indicated by the ahaadeeth quoted above. 

In that case, the killer may be set free and he should be obliged to pay the diyah. 

Handout: Takaful Dr. Humaira Asad 9 September 2020

AL-QASAMAH
Reference: Book 16 : KITAB AL-QASAMA WA'L-MUHARABA WA'LQISAS WA'L-DIYAT (THE
BOOK PERTAINING TO THE OATH, FOR ESTABLISHING THE RESPONSIBILITY OF MURDERS
FIGHTING, REQUITAL AND BLOOD-WIT)
http://www.quranalmajid.com/assets/Hadith/Sahih_Muslim_English/Book16_Kitab_Al_Qasama.pdf

Hadith 4123: Bushair b. Yasar reported that 'Abdullah b. Sahl b. Zaid and Muhayyisa b. Mas'ud b. Zaid,
both of them were Ansar belonging to the tribe of Banu Haritha, set out to Khaibar during the lifetime of
Allah's Messenger (may peace be upon him). There was peace during those days and (this place) was
inhabited by the Jews. They parted company for their (respective) needs. 'Abdullab b. Sahl was killed, and
his dead body was found in a tank. His companion (Muhayyisa) buried him and came to Medina, and the
brothers of the slain 'Abd al Rahman b. Sahl. and Muhayyisa and Huwayyisa told Allah's Messenger (may
peace be upon him) the case of 'Abdullah and the place where he had been murdered. Bushair reported on
the authority of one who had seen Allah's Messenger (may peace be upon him) that he had said to them:
You take fifty oaths and you are entitled to blood-wit of (one) slain among you (or your companion). They
said: Messenger of Allah, we neither saw (with our own eyes this murder) nor were we present there.
Thereupon (Allah's Messenger is reported to have said): Then the Jews will exonerate themselves by taking
fifty oaths. They said: Allah's Messenger, how can we accept the oath of unbelieving people? Bushair said
that Allah's Messenger (may peace be upon him) paid the blood-wit himself.

Mawalat is the contract whereby one party agrees to bequeath his estate to the latter, on the understanding
that the benefactor will pay any diyya that may eventually be due by the former. This contract is invalid in
Hanbali law, which rejects contractual inheritance (Ibn Qadumah 1972: 6:381). Muwalat has often been
described as a kind of liability insurance (Al-Zarqa 1984b: 1:560; a contrario Muslehuddin 1966: 179).

Ref: Book on Insurance

Mawalat is similar to Liability Insurance

What Is Liability Insurance? (Unintentional Negligence)
Liability insurance provides the insured party with protection against claims resulting from injuries and
damage to people or property. Liability insurance policies cover both legal costs and any payouts for which
the insured party would be responsible if found legally liable. Intentional damage and contractual liabilities
are generally not covered in these types of policies.

What is the amount of diyat?

Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet
Muhammad and upon all his Family and Companions. The majority of Muslim scholars are agreed that the
Diya (blood money) of a free Muslim man is hundred camels for those who raise camels. This is the basic
rule in evaluating the blood money. Those who possess cows should pay two hundred cows, and those who
possess sheep should pay two thousand sheep, and those who possess gold should give one thousand Dinar,
and those who possess silver have to pay ten thousand or twelve thousand Dirham, and those who possess
suits of clothing two hundred suits. Know that the value of gold varies from time to time and market to
market. The majority of Muslim scholars are agreed upon that camels are basically used for the evaluation of
the blood money but they are disagreed concerning the other things mentioned above, if there are no camels.
The value of the blood money is fixed; it does not change whether the killing was accidental or
premeditated. However, the blood money becomes more dense in the case of premeditated murder,
especially if Diya is paid in the form of camels. The killer in this case has to pay the blood money in three
kinds of camels; i.e., 30 she camels which had entered their fourth year, and 30 she camels which had
entered their fifth year, and forty camels which are pregnant. Or he has to pay in four kinds; i.e., 25 she
camels which had entered their second year, 25 she camels which had entered their third year, 25 she camels
which had entered their fourth year, and 25 she camels which had entered their fifth year. While in the case
of accidental homicide the type of blood money is much easier than the above. He has to pay only hundred
Handout: Takaful Dr. Humaira Asad 9 September 2020
camels in five kinds as following: 20 she camels which had entered their second year, 20 she camels which
had entered their third year, 20 (male) camels which had entered their third year, 20 she camels which had
entered their fourth year, and 20 she camels which had entered their fifth year. Know that the blood money
of a woman is half the blood money of a man. However, the value of blood money in the current currencies
varies from place to place and time to time. One may find out the current value by consulting the banks or
money exchangers, etc. The details mentioned so far are related to the blood money of a free Muslim when
he is killed. If a Kafir (Harbi) who is in state of war with Muslim is killed, he does not deserve any blood
money. If the Kafir is not Harbi and he is among the People of the Book then his blood money is the same as
the blood money of a Muslim according to Abu Hanifa . Imam Malik is of the opinion that his blood money
is only half that of the blood money of a Muslim. Imam Shafie said: he deserves one third of the blood
money of a Muslim. Every one of them based his opinion on some evidences. There is a Hadith that the
Prophet (Sallallahu Alaihi wa Sallam) said: The blood money of the People of the Book is half that of
Muslims . Ibn Hajar said, it is reported by Ahmad and four complier of Sunan. Imam al-Khattabi said: there
is no clearer evidence concerning the blood money of the People of the Book than the above Hadith .
Therefore, you may know that the opinion of al-Malikiyah in this subject is stronger than the others. Allah
knows best.
There is no doubt that a woman's Diyyah (blood money) is half of that of a man; there is a consensus
amongst the scholars on this issue.

Handout: Takaful Dr. Humaira Asad 9 September 2020