Tabarru': giving into a shared fund
When you join a Takaful plan, part of your contribution is given as Tabarru', a voluntary donation to the participants' risk fund. The idea comes from Ta'awun, or mutual help: everyone in the pool agrees to support any member who suffers a covered loss.
This changes the relationship. In conventional insurance, the company keeps what it does not pay out in claims. In Takaful you are one of many participants who share risk with each other, and the fund is held for the participants as a group.
The participants' risk fund is used for a small number of clear purposes:
- paying covered claims to participants
- buying Retakaful to protect the fund itself
- meeting other costs that your policy wording allows
Because the fund is shared, honesty matters to everyone in it. When you declare the facts about your car, your health or your business accurately, the contribution asked of each participant stays fair. An undeclared risk quietly shifts cost onto other members of the pool.
Kalkaal's Shariah Supervisory Board reviews how the fund is structured and run, so that the arrangement stays within Shariah principles and the terms agreed with participants.