1.0 Background of study
This paper are more about to study the factors that influencing Malaysian to choose Takaful over conventional insurance. Takaful have difference concept than conventional insurance, obviously. Because Takaful is more Islamic and follow the Shariah compliance. Conventional insurance elements are rejected by Shariah which are uncertainty ( gharar ), interest ( riba ) and gambling ( masyir ) . The study contributed new knowledge as capture where are, Takaful customers have a clear concept of Takaful and the requirement of Shariah compliance, Takaful customers have awareness on the relationship between Takaful and religion and the roles of Takaful agents in explaining the concept of Takaful and the benefits can be consider as aspect of workship(ibadah) (Nail Mohammed Kamil, 2014) As been said before, this research will conducted to know the factors that influence Malaysian to choose Takaful over conventional insurance this day
2.0 Problem statement
Lately, most Malaysian have been change their mind to choose Takaful as their life, business, medical, and any other product of insurance rather than conventional insurance. Numerous studies have attempted to explain the factor that influence Malaysian to choose Takaful over conventional insurance. There is no relationship between understanding the concept of Takaful and gender, profession and income. However , there is positive relationship between understanding Takaful and participation in Takaful schemes (Zakariah, 2005). Furthermore, Islamic insurance company’s liquidity is higher than the conventional insurance companies. Also, Islamic insurance company are less risky and well capitalized than conventional insurance (Juliana Arifin, 2013). The study contributed new knowledge as capture where are, Takaful customers have a clear concept of Takaful and the requirement of Shariah compliance, Takaful customers have awareness on the relationship between Takaful and religion and the roles of Takaful agents in explaining the concept of Takaful and the benefits can be consider as aspect of workship(ibadah) (Nail Mohammed Kamil, 2014) . People choose Takaful as the agency who will cover any lost in the future. Takaful is mean a guarantee, look after or trust. Takaful use the concept of tabarru’ which mean donation, gift or contribution ( Billah, 2001 ). Takaful is the Islamic alternative to conventional insurance. The idea of social solidarity, cooperation and joint indeminifications of losses of the members. (Hussain, november 2011) The participants in the Takaful agreed to jointly indeminity the loss or damage that might happen upon to any of the participant . However, studies of the factor that influence Malaysian to choose Takaful over conventional insurance were scares. Thus this study aim to investigate the factor that influence Malaysian to choose Takaful over conventional insurance.
3.0 Significance of the study
This research is about wanted to know why actually Malaysian choose Takaful than conventional insurance. This is because the Takaful concept is increasingly understood and well accepted among Malaysian (Nail Mohammed Kamil, 2014). Since, this study has been conducted in Malaysia, the result shows that people mostly choose Takaful than conventional insurance. The concept and elements that used by conventional insurance are totally contrast to each other. Malaysia as one of the Islam countries. Yet , not only muslim people who be the participant in Takaful. In conventional insurance, the profit insurance are only based on the management, while in Takaful all the profit are known by the participant before they agree to be apart of it. Futher, in conventional the contract is based on the principles of exchange interest. Although, in Takaful the contract every participants has the right to know their money is user and how the surrender value be calculated.
4.0 Research objective
1.To investigate the factors influencing the choose of Takaful over conventional insurance in Malaysia.
2.To find the benefits of Takaful over conventional insurance
3.To know the differences between Takaful and conventional insurance.
5.0 Research question
1.What are the factors contributing to the acceptance of the Takaful product ?
2.What are the benefits of Takaful over conventional insurance?
3.What is the differences between Takaful and conventional insurance ?
6.0 Expected contribution
Expected from this study to know the factors that influence Malaysian that choose Takaful over the conventional insurance. This is because the Takaful concept is increasingly understood and well accepted among Malaysian (Nail Mohammed Kamil, 2014). This study attempted to gain a dept understanding of what actually Takaful are all about and how it varies from conventional. Also, Muslims are strictly prohibited in purchasing conventional product because it is consider as Haram and opposite with Shariah Law (Muhammad Abduh, 2012)
Besides that, the expected is to find the benefit of Takaful are the elements are based on Shariah Law where the models are Mudarabah, Wakalah, Waqf and Tawarruq (Ramin Cooper Maysami, 2006). However , all those models are not apply in conventional insurance products. In addition, Takaful concept and its difference with conventional are frequently discussed (Billah, 2003).
In conclusion, Takaful is better than the conventional because it is following the Shariah Law. Furthermore, Takaful are less risky and well capitalized than the conventional insurance. Malaysian tend to choose Takaful more than the conventional insurance. In addition, the Takaful or Islamic insurance company’s liquidity is higher than conventional insurance. Muslims believe the Qadha and Qadr, yet still net to find way to keep away from trouble and minimize the risk of financial loss, and Takaful the best product for them (Farooq Alani, 2012)
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