To what extent does the Takaful insurance system, which relies on a monthly subscription with two components—one a donation for insurance coverage and the other for investment—comply with the provisions of Islamic Sharia?
The cooperative insurance mentioned in the question is Islamically permissible due to its inclusion of three legitimate contracts: a contract of donation, as participants pay premiums with the intention of cooperation; a contract of agency, as the company undertakes all insurance procedures; and a contract of (profit-sharing), as the company invests the funds and receives a share of the profit. The Islamic Fiqh Academy has permitted these contracts. Cooperative insurance covers damages and individuals (death or injury), and it is Islamically permissible because it is based on cooperation, righteousness, and benevolence, and does not conflict with the texts of or its general principles.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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