Access to insurance, as part of a broad range of essential financial services, is especially important for poor households in order to smooth consumption, build assets,absorb shocks, and manage risk associated with irregular and unpredictable income. Without access to good formal insurance services, the poor depend on less reliable and often far more expensive informal sector mechanisms.
Yet, in many majority Islamic countries, accessing and using insurance products has been quite limited, as many Muslims avoid such services over concerns about riba (interest ),gharar (uncertainty and ambiguity in contracts), and maysir ( speculative risk ), among others factors.
Takaful Insurance products are emerging as a central part of the Shariah-compliant family of financial services, helping meet insurances needs in way that area consistent with the local norms and belief of many majority Islamic countries.
Takaful and Mutual Insurance by Serap O. Gonulal,Editor