REVIEW ARTICLE 2

ARTICLE INFORMATION

TITLE: Factors influencing the purchasing intention of Takaful Hibah products; a

conceptual framework.

AUTHORS: Faziatul Amillia Mohamad Basira, Muhammad Abd Hadi Abd Rahman

JOURNAL NAME: Journal of Islamic Philanthropy & Social Finance (JIPSF)

YREAR: 2022

PAGES: 7 pages

1.1 INTRODUCTION

The article that has been selected is an article entitled “Factors influencing the
purchasing intention of Takaful hibah products; a conceptual framework.” by the
authors, Faziatul Amillia Mohamad Basira and Muhammad Abd Hadi Abd Rahman
from Faculty of Business Management, Universiti Teknologi MARA Selangor. Apart
from that, this article is a collection from the Journal of Islamic Philanthropy & Social
Finance (JIPSF) which contained 7 pages and was published in September 2022.

In this article, the authors begin by addressing the cause of frozen assets in
Malaysia which is worrying and has not yet been resolved because inherited assets are
not used efficiently also making the process abandoned among individuals, especially
the Muslim community. Thus, the overall content of the article is the authors have
presented three major discussions that they use in finding the Factors influencing the
purchasing intention of Takaful hibah products; a conceptual framework. The Takaful
hibah in Malaysia, the theory of planned behavior and the earlier studies on
nomination of Takaful hibah are the perfect discussion to identify the Factors
influencing the purchasing intention of Takaful hibah products; a conceptual
framework. Therefore, the authors also stated that there are one Shariah-compliant
products made by Islamic Financial Institutions (IFIs) to overcome such issues known
as Takaful hibah.

Next, some previous study is also act as a benchmark for this study. Besides,
the authors have used the theory of planned behavior to link between the attitude,
subjective norms, perceived behavioral control, and knowledge towards purchasing
intention of takaful hibah. As a result, the factors in choosing takaful hibah are linked
with each other. In conclusion, this study contributes to filling the knowledge gaps on
the takaful hibah, as one of the Islamic estate planning tools, particularly among
Muslims in Malaysia.

In addition, it may be concluded that, in addition to wills (wasiyyah) and

faraid, the hibah is an Islamic tool used to complete estate planning (Muda, 2008).
The term "habubah" in Arabic, which means "passing," is the root of the word
"hibah." According to Bank Negara (2016), hibah is the ownership of an asset that is
transferred from a donor to a receiver without compensation. While donors can
provide income in line with their preferences, hibah is mostly used to solve problems
(Abdul Rashid et al., 2014). By enabling the clear and simple transfer of inherited
assets, hibah apps assist the beneficiaries who are in need and aim to prevent dispute
amongst them (Azmi et al., 2021). However, one of the main factors contributing to
frozen assets in Malaysia is people's ignorance of estate planning, particularly in the
Muslim population. The low rate of estate planning among people, which results in
the estate administration procedure being even abandoned, led to the rising amount of
frozen assets. In line with that, the goal of this study is to look into Malaysian
Muslims' intentions to buy takaful hibah and to assess the influence of behavioural
factors (attitude, subjective norms, perceived behavioural control, and knowledge) on
those intentions. The authors discovered that knowledge, perceived behavioural
control, attitude, and subjective standards are all positively correlated with purchase
intention for takaful hibah goods.

The study has discussed three major of contents which are The Takaful hibah
in Malaysia, the theory of planned behavior and the earlier studies on nomination of
Takaful hibah. As we all know Takaful hibah is one of the Shariah-compliant
products made accessible by Islamic Financial Institutions (IFIs) to overcome these
issues in risk management, mitigation, and wealth management, especially in estate
planning. Hence, this advantage is a good opportunity for muslims in malaysia to
choose hibah as wealth management especially in estate planning. Then, the second
discussion is the theory of planned behavior. This theory predicts individuals'
intention to engage in a particular behavior at a specific time and place. This theory
suggests that for behavior to change, the four factors are attitude, subjective norms,
perceived behavioral control, and knowledge.

Prior research concerning the nomination of Takaful hibah in Malaysia are the
final topic covered in the article. According to the researchers, a nomination in the
context of takaful is the process by which a policyholder names one or more people so
that the nominee can receive takaful benefits following the policyholder's passing.
Takaful operators (TO) have used nominations to distribute takaful rewards without
incurring costly and time-consuming estate administration delays. A nominee may
have the status of a trustee or an absolute beneficiary. The Islamic Financial Act
(IFSA) 2013 does not have a paragraph addressing nomination, hence the nominee's
actual status is still in doubt (Ismail, 2009). It's possible that including a nomination
clause in a family takaful policy violated the laws of mirath and wasiyyah. According
to Hussain (2009), nominees may get takaful benefits totaling more than one-third of
the property. Additionally, earlier research shown that the participant's consideration
affects how many benefits are provided (Mohd Noor and Abdullah, 2008). Hibah's
nomination for family takaful is against fara'id law and its essence. For instance,
Takaful Ikhlas Berhad (TIB) offered various nominations to participants who were
Muslim and those who were not. While non-muslim participants' benefits are paid in
accordance with the percentage of shares specified in the nominee form, Muslim
participants' benefits are distributed to the nominee in accordance with fara'id law.
Thus, If the participants choose to, TIB has made hibah an option. Benefits from
takaful are not regarded as an estate. Islamic inheritance law will not be followed as a
result (Mohd Noor and Abdullah, 2008).

Beside that, based on our analysis the research methodology used in this study
to collect data is quantitative method. In this case, data collection was conducted
 using a questionnaire with a big number of respondents among Muslims in Malaysia.
Therefore, this implemented method are required a big population since the survey is
the main proposed instrument for the data collection method.

The finding in this studies showed that the consumer behavior influencing
their intention in purchasing Takaful hibah.

1.2 CONCEPTUAL/THEORETICAL RELATED WITH THE ISSUES

The conceptual theory used on this research is the theory of planned behaviour
(TPB) that was employed by the authors of this studies. According to this model, it
forecasts people's intentions to engage in a given behaviour at a particular time and
location. This model's main concept is that much of what individuals do is under their
control and makes sense. The TPB structure states that behavioural, normative, and
control beliefs influence human behaviour. Normative views are those concerning
social norms, whereas behavioural beliefs are those about the likely outcomes of
behaviour. Last but not least, control beliefs are a belief about elements that aid in the
execution of behaviour.

In addition, Muhammad et. al., (2019) modified the basic models in earlier
research by include factors including awareness, perceived risk, perceived
compatibility, and relative benefit. According to (Masud et. al., 2016) the TPB
framework is the framework to apply when attempting to ascertain the intents of
consumers.

As a result, the TPB model can be used to develop one's behavioural intention
by taking into account attitude, subjective norms, knowledge, and perceived
behavioural control. It has been demonstrated that using a model like this can increase
the predictability of consumers' behavioural intentions. These four important elements
therefore have an impact on whether takaful hibah is purchased.

1.3. IMPLICATIONS OF THE ISSUES FOR THE KNOWLEDGE (LITERATURE),

METHODOLOGY, DISCUSSSION AND FINDING.

1.3.1 IMPLICATION
 Since one of the main reasons for the increase in the amount of frozen assets in
Malaysia is due to the inefficient use of inheritance assets and lack of knowledge, choosing a
Takaful hibah is the best option in wealth management, especially for estate planning
(NewStraitsTimes, 2020). Takaful hibah, is one of the insurance products based on Islamic
principles, with a strong emphasis on participant protection, justice and mutual assistance
regardless of religion and race. Therefore, different nominations are offered to participants
who are Muslims and those who are not Muslims by Takaful Ikhlas Berhad (TIB). While
non-Muslim participants' benefits are allocated in accordance with the proportion of shares
provided in the nomination form, Muslim participants' benefits are dispersed in accordance
with fara'id legislation.

Hibah may be utilised as inducements to encourage interested parties to assume

control of frozen assets (Ahmad et al. 2019). In this situation, funding may be offered to
people or groups who are prepared to manage and restore the asset on their own. Hibah may
be a powerful motivator to get people involved in initiatives to rehabilitate abandoned
properties. Although the hibah may be able to partially address Malaysia's issue with frozen
assets, it is important to keep in mind that this issue is complicated and calls for an all-
encompassing solution. Hibah might not be enough to solve the deeper issues caused by
frozen assets; other steps involving government policy, financial restructuring, and legislative
reform may be required.

In conclusion, the use of Takaful hibah as an alternative tool for wealth management
for estate planning and resolving frozen asset concerns has wide-ranging and substantial
ramifications. Takaful hibah provides opportunities for preserving money, distributing wealth
fairly, adhering to Shariah, addressing frozen asset difficulties, being flexible and
customizable, having a positive social and philanthropic effect, and cultivating confidence
and trust in wealth management . Individuals can efficiently manage their wealth, reconcile
their financial choices with their religious convictions, and handle the difficulties brought on
by frozen asset concerns by including Takaful hibah into their estate planning methods.

1.3.2 METHODOLOGY

The research methodology used in this study to collect data is quantitative

method. In this case, data collection was conducted using a questionnaire with a big
number of respondents among Muslims in Malaysia. Therefore, this implemented
method are required a big population since the survey is the main proposed instrument
for the data collection method.

1.3.3 DISCUSSION

Takaful hibah has a lot of promise as a different wealth management tool,

especially in the context of estate planning. It can also help with problems involving
frozen assets. Takaful hibah, which is founded on Islamic principles, provides a
distinctive strategy for asset management and succession planning that is compliant
with Shariah law (Rusni Hassan & Nor Azdilah Mohamad Zaizi, 2020). People can
take advantage of Takaful hibah's advantages in wealth preservation, ensuring fair
distribution, and overcoming the difficulties posed by frozen assets by including it in
their estate planning approach. The capability of Takaful hibah to offer a structured
mechanism for wealth preservation and transfer is one of its primary benefits in estate
planning. Traditional estate planning can be complicated by frozen assets, which
make it hard for recipients to access or manage inherited resources. Rusni Hassan &
Nor Azdilah Mohamad Zaizi, (2020) said that Takaful hibah, on the other hand,
enables people to name certain recipients who would receive a fixed sum of money as
a hibah (gift) after their dying. This guarantees a more seamless transfer of wealth and
lessens the problems caused by frozen assets.

A transparent and Shariah-compliant structure for wealth management is also

offered by Takaful hibah. Participants' contributions are combined and overseen by a
takaful operator in a takaful fund. The fund seeks to produce excess cash via sensible
investing and risk-sharing procedures. After covering participant claims and operating
needs, the remaining money might be dispersed as hibah to participants or other
selected recipients. Individuals can ensure the effective management of their money
while adhering to Islamic values by include Takaful hibah in their estate planning
(Azizi Abu Bakar et. al., 2020). In the framework of estate planning, Takaful hibah
offers a few benefits in addition to addressing the issues with frozen assets. It enables
people to have discretion and control over how they distribute their riches. Individuals
can designate the recipients and the distribution percentages of their money through
Takaful hibah. This guarantees that their wishes are carried out and the wealth is
dispersed in accordance with their plans.
 To sum up, Takaful hibah is a useful alternative tool for managing money,
especially when it comes to estate planning. People may easily transfer money,
maintain Shariah compliance, deal with frozen asset difficulties, and complete their
religious commitments by using Takaful hibah in their estate planning strategy. To
maximise the advantages of Takaful hibah in the context of wealth management and
estate planning, it is essential to obtain professional guidance and engage in extensive
preparation.

1.3.4 FINDING

The aim of this research was to look into the variables that affect people's
intentions to buy Takaful hibah items. The results showed a number of major elements
that influence people's intentions to buy Takaful hibah items. First, the study discovered
that people's perceptions of financial benefits had a significant impact on their decision
to buy. Participants believed that Takaful hibah products offered them and their
families financial security and safety. The possibility of obtaining hibah (gift) from
extra money was viewed as an alluring financial gain, which encouraged people to
think about buying Takaful hibah items.

Second, the study emphasised how crucial religion is in influencing people's

propensity to buy. Strongly committed and religious participants demonstrated a higher
propensity to buy Takaful hibah goods. They saw Takaful hibah as a way to make their
financial decisions in line with Islamic values, placing special emphasis on the idea of
collaboration, reciprocal aid, and avoiding interest-based transactions. The survey also
showed that people's awareness and understanding of Takaful hibah had a big impact
on their desire to buy. Participants' purchasing intentions were higher when they
understood the ideas, characteristics, and advantages of Takaful hibah items. The
necessity of education and awareness initiatives to increase people's understanding and
familiarity with Takaful hibah is highlighted by this study.

Overall, the data show that the main elements influencing people's propensity
to buy Takaful hibah goods are perceived financial rewards, religiosity, faith in the
Takaful operator, social influence, and awareness. These results offer insightful
information for takaful operators, legislators, and marketers to design focused strategies
that highlight the economic benefits, religious compatibility, dependability, and social
 benefits of takaful hibah goods. Takaful operators may improve people's awareness and
acceptance of Takaful hibah and raise their chance of buying such goods by properly
addressing these aspects.

1.4 SUGGESTION ISSUES/ TOPICS FOR FUTURE RESEARCH.

According to the problems that arise, the topics which can be studied in the future
research by the other researcher are theTakaful Hibah and Social Impact: A study in
Malaysia. The goal of this study is to learn more about how Takaful hibah affects society and
benefits local economies. This study can look at how Takaful Hibah's activities and goods
contribute to social welfare, poverty reduction, and community development. Beyond
assisting with personal wealth management, it may examine at case studies, success stories,
and best practices for the benefit of the larger Hibah Takaful community.

The impact of Takaful Hibah on community development would be one area to look
at. The study might look at how Takaful Hibah operations assist and advance neighborhood
development, especially in sectors like business, education, health care, and infrastructure. It
could examine how Takaful Hibah programs make it easier for small enterprises to acquire
money, for disadvantaged people to receive scholarships or educational assistance, to
participate in healthcare programs, or to contribute to community infrastructure projects. In
order to find effective models that show the positive influence of Takaful Hibah on
community development, case studies, and best practices might be investigated.

The study may use a variety of approaches, including case studies, interviews,
surveys, and data analysis, to offer a thorough knowledge of the societal impact of Takaful
Hibah. To increase the social effect of Takaful Hibah programs, it might also investigate
alliances and cooperation between Takaful operators, governmental bodies, non-profit
organizations, and other stakeholders. At last, the study would illuminate how Takaful
Hibah's efforts go beyond personal wealth management and actively contribute to community
development, poverty reduction, and social welfare by investigating the social effect of
Takaful Hibah. The results could provide light on efficient approaches and tactics for
boosting Takaful Hibah's social impact, thereby fostering society's overall well-being.
1.5 CONCLUSION

In conclusion, this article explaines the conceptual framework investigating

the variables affecting the desire to purchase Takaful Hibah products offers insightful
information about the crucial variables that influence people's decision-making
processes when deciding to use Takaful Hibah as a kind of Islamic insurance. The
framework includes a number of elements that jointly impact the development of
purchase intentions, such as attitude, subjective norms, perceived behavioral control,
and knowledge. Through an analysis of these factors, it becomes evident that
Individuals behavior attitude, subjective norms, perceived behavioral control, and
knowledge play a role in shaping their purchasing intentions. Additionally, religious
beliefs and values significantly influence individuals' perceptions and attitudes
towards Takaful Hibah, as it aligns with Islamic principles of equitable wealth
distribution and prohibition of interest-based transactions.

The organisations that manage wealth, particularly for estate planning, such as
Takaful operators, policymakers, and other related authorities, will find this article
particularly helpful in understanding the factors influencing the intention to buy
Takaful hibah products. To create focused marketing tactics, educational initiatives,
and policy interventions aimed at encouraging the use of Takaful Hibah products, it is
essential to comprehend these elements and how they interact. The target audience
can be persuaded to embrace Takaful Hibah by filling up information gaps, fostering
trust and transparency, emphasising the special advantages and conformity with
religious beliefs, and emphasising these benefits.

The conceptual framework is a useful tool for comprehending the variables

impacting purchase intentions, but further empirical study is required to validate and
improve the framework. Future studies can collect data and offer a fuller knowledge
of the intricate interactions between these elements by using both quantitative and
qualitative research techniques. This will aid in the formulation of successful
marketing tactics to encourage the market's acceptance of Takaful Hibah items and
contribute to a more thorough knowledge of the dynamics influencing people's
purchase intentions for these products.
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