Evaluation of Contemporary Takaful Practices from the Perspective of Maqasid al-Shariah

Abstract

Abstract

Purpose

Takaful industry is one of the faster growing sectors in Islamic finance industry. Despite this growth, Shariah scholars and economists have reservations and doubts regarding the Shariah legitimacy of current practices of takaful, on account of Maqasid al-Shariah. Hence, the purpose of the study is to analyze the current takaful practices from the perspective of objectives of Shariah relevant to Islamic finance and specifically takaful.

Methodology

The study uses qualitative method of research where theoretical framework has been designed using classical and contemporary writings, and then methodologies of inductive approach and analysis of existing researches has been utilized, for investigation.

Findings

The study reveals that takaful institutions may be fulfilling the objective of Shariah in their operations by meeting the fundamental prohibitions and abiding by the provisions and rules of Islamic law. However, due to its emphasis on profiteering, as the sole objective of takaful, it has failed to achieve the real objectives of Shariah associated with takaful, such as justice, equity, fairness, solidarity, mutual cooperation, and ultimately faith and wealth.

Significance

To the best of researcher’s knowledge, there is no study available which has critically analyzed the practices of takaful institutions from the perspective of maqasid al-Shariah specifically for Islamic finance and takaful.