---
title: "What is Takaful? | IslamicOpenFinance™"
description: "Mutual cover: participants contribute to a common fund, as donations, to help one another against specified losses."
url: https://islamicopenfinance.com/glossary/takaful/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Takaful](https://islamicopenfinance.com/glossary/#takaful)

Takaful

# Takaful

Mutual cover: participants contribute to a common fund, as donations, to help one another against specified losses.

Takaful is a mutual guarantee in which a group of participants agree to support one another jointly against losses from specified risks, from a fund to which all commit to donate, as IFSB-29 defines it. The fund belongs to the participants collectively and is managed by a takaful operator, usually for a wakalah fee, a mudarabah share of investment profit, or both. Keeping participants' funds separate from the operator's own is central to the model.

## Sources

- [IFSB-29 Conduct of Business Supervision for Takaful Undertakings, 2023: Definitions, Takaful](https://www.ifsb.org/wp-content/uploads/2023/12/IFSB-29-Conduct-of-Business-Supervision-for-Takaful-Undertakings.pdf)

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

[**Tabarru** The donation portion of a takaful contribution, paid into the risk fund to meet claims as mutual help.](https://islamicopenfinance.com/glossary/tabarru/) [**Participants' risk fund** The pool of donated contributions from which takaful claims are paid, owned collectively by participants and managed by the operator.](https://islamicopenfinance.com/glossary/participants-risk-fund/) [**Takaful operator** The entity that manages a takaful business on behalf of participants, usually for a fee, a profit share or both.](https://islamicopenfinance.com/glossary/takaful-operator/) [**Shareholders' fund (takaful)** The takaful operator's own fund: its capital, fees and expenses, kept apart from the participants' funds.](https://islamicopenfinance.com/glossary/shareholders-fund/) [**Retakaful** Takaful for takaful funds: a takaful undertaking cedes part of its risks to a retakaful fund on behalf of its participants.](https://islamicopenfinance.com/glossary/retakaful/)

**Takaful**

1. [Tabarru](https://islamicopenfinance.com/glossary/tabarru/)
2. [Participants' risk fund](https://islamicopenfinance.com/glossary/participants-risk-fund/)
3. [Participants' investment fund](https://islamicopenfinance.com/glossary/participants-investment-fund/)
4. [Shareholders' fund (takaful)](https://islamicopenfinance.com/glossary/shareholders-fund/)
5. [Takaful operator](https://islamicopenfinance.com/glossary/takaful-operator/)
6. [Wakalah model (takaful)](https://islamicopenfinance.com/glossary/wakalah-model/)
7. [Takaful participant](https://islamicopenfinance.com/glossary/takaful-participant/)
8. [Underwriting surplus](https://islamicopenfinance.com/glossary/underwriting-surplus/)

[All 221 terms](https://islamicopenfinance.com/glossary/)