Takaful participant
A person or business that joins a takaful scheme, contributes to its funds and is entitled to compensation under its terms.
A takaful participant is a party that participates in a takaful product and has the right to compensation or other entitlements under a takaful contract, in IFSB-29's definition. Participants are both contributors to and beneficiaries of the participants' risk fund, which can give them an interest in its surplus that a conventional policyholder does not have. Conduct rules focus on making sure they understand the contract, the fees and their share of any surplus.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
TakafulMutual cover: participants contribute to a common fund, as donations, to help one another against specified losses.TabarruThe donation portion of a takaful contribution, paid into the risk fund to meet claims as mutual help.Underwriting surplusWhat remains in the participants' risk fund after claims, expenses and reserves, plus attributed investment returns.Takaful operatorThe entity that manages a takaful business on behalf of participants, usually for a fee, a profit share or both.