‘Aqd (plural ‘uqud)
A contract.

Group of family members from paternal side (or the parties) who are liable to mutually share the cost of blood-money in case of unintentional killing.

The Holy Book of Muslims consisting of verbal revelations of God (Allah) to Prophet Muhammad (peace be upon him) via angel Gabriel (Jibril). The Quran lays down the fundamentals of Islam which includes beliefs, moral values and laws that cover all aspects of life.

Reliability, trustworthiness and honesty. An important value of Islamic society in mutual dealings. It also refers to deposits in trust, where a person may hold property in trust for another.

Sale contract.

Bai’ ‘inah
Sale contract followed by repurchase by the seller at a different price.

Bai’ Bithaman Ajil
Sale contract based on deferred payment at certain price (normally marked up).

Bai’ dayn
Sale of debt.

Bai’ salam
Sale contract based on order of certain asset with certain specifications. Full payment is made in cash at the time of conclusion of the contract whereas the delivery of the asset is deferred to a specified time.

Certificate document
An evidence of a contract between a participant and a Takaful operator on behalf of the Tabarru’ fund which sets out the terms and conditions of the particular certificate.

Notification to a Takaful operator that payment of an amount is due under the terms of the certificate.

Monetary contribution provided once or periodically by a participant to a Takaful operator as ‘wakeel’ (agent) for the purpose of investment and Tabarru’.


Expense rate
The ratio of total expenses for the year (including commissions, salaries, etc.) to the sum of total contribution income other than single contribution and consideration for annuities.

Faqih (plural Fuqaha)
Fiqh scholars/ jurists.

Islamic law of inheritance and estate distribution.

Defective or invalid. This is a legal value for a contract which has irregularities.

Religious decree or an authoritative legal opinion based on Islamic law (Shariah).

The knowledge of Shariah rulings (Islamic jurisprudence) which are derived from specific evidence in contrast with conventional law, fiqh covers all aspects of life, religious, political, social, commercial, economic and other human beings' activities. The whole corpus of fiqh is based primarily on interpretation of the Quran and the Sunnah and secondarily on ijma’ (consensus) and ijtihad (individual judgement).

Fiqh Muamalat
Islamic law of transactions.

Element of uncertainty or ignorance

Gharar Fahish
An excessive/substantial gharar that is not tolerable and will render a contract null and void.

Gharar Yasir
A minor/slight gharar that is tolerable and will not invalidate a contract.

Group Family Takaful
Family Takaful (usually without medical examination) on a group of people under a master certificate. It is typically issued to an employer for the benefit of employees, or to members of an association.

All that is narrated from the Prophet (peace be upon him) which include his acts, sayings, approvals, intentions, physical appearance and manners.


Haq Maliy
Haq Maliy are rights on the financial assets. Examples of such rights are haq dayn (debt rights) and haq tamalluk (ownership rights).


An act of transferring of ownership of an asset to the beneficiary without any consideration.

Hukum (plural Ahkam)
Shariah rulings having general applicability.

Rebate/waiver of partial or total claim against certain right or debt.

Lease contract.

A consensus of Muslim jurists after the demise of Prophet Muhammad (peace be upon him) on a particular Shariah issue. Ijma’ is one of the sources of Islamic Law.

Reasoning by qualified Shariah scholars to obtain Shariah rulings from the sources of Shariah.

Individual Family Takaful
A contract that provides Takaful benefits payable to an individual upon death/total permanent disability or periodic income to participant upon retirement.

Investment-linked Takaful
A contract where the certificate benefits at any time vary according to the value of the Takaful underlying assets at the time.

Juristic preferences, disregarding a ruling backed by a dalil (proof) and resorting to another ruling which is also backed by other dalil that is sounder.



Maqasid al-Shariah
Objectives of Shariah of a legal rule which is meant to enjoin benefits for the mankind.

Maslahah (plural masalih)
Consideration of public interest

Medical and Health Takaful
A contract that provides specified medical treatment benefits such as the cost of hospitalization, Takaful surgical and physician consultation fees against risks of a person being diagnosed with certain illnesses or suffering injury as the result of an accident.

A partnership in profit whereby one party provides capital (rabb al mal) and the other party provides labour (mudharib).

An entrepreneur in a mudharabah.

Settlement of debt by set off.

Cost-plus profit sale.

Partnership, joint venture, profit and loss sharing.

Participants’ Investment Fund (PIF)
An account to credit a portion of contributions from the participant for the purpose of investment/savings.

Participants’ Risk Fund (PRF)
An account to credit a portion of contributions from the participant for the purpose of Tabarru’.

Benevolent loan.

The analogical deduction that aims at extending an existing Shariah ruling to a new case. For cases not explicitly dealt with in the primary sources the scholar applies analytical analogical deduction based on similar cases prescribed in the Qur’an and Sunnah.

Pledge or collateral.

Means an arrangement of risk sharing consistent with sound Takaful principles for Retakaful of liabilities in respect of risks incurred or to be incurred by the Takaful operator in the course of his carrying on Takaful business.


An attachment to a basic certificate that provide additional benefits.

Islamic Laws.

Sukuk (plural of Sokk)
Financial documents whose value is backed by certain assets.

Compensation charged to a debtor for deliberate delay in payment. 

A portion of the participant’s contribution for the purpose of mutual helps and used to pay claims submitted by eligible claimants.

Mutual guarantee provided by a group of people against a defined risk or catastrophe befalling one’s life, property or any form of valuable things. According to Takaful Act 1984, Takaful means “a scheme based on brotherhood, solidarity and mutual assistance which provides for mutual financial aid and assistance to the participants in case of need whereby the participants mutually agree to contribute for that purpose”.

Takaful annuity
A contract that provides a stream of periodic income upon retirement for a term dependent upon human/life.

Takaful business
Means business of Takaful whose aims and operations do not involve any element which is not approved by the Shariah.

An arrangement that involves a purchase of an asset based on musawamah or murabahah and a subsequent sale of the same asset to a third party in order to gain cash money.

Service Fee

'Uqud al-Mu’awadhat
Exchange contracts

'Uqud al-Tabarruat
Charitable contracts.

Agency. A contract where a party authorises another party to act on behalf of the former.

Waqf (plural awqaf)
An endowment or a charitable trust set up for Islamic purposes (usually for education, mosques or for the poor). It involves tying up a property in perpetuity so that it cannot be sold, inherited or donated.

One of the pillars of Islam which refers to an obligatory donation imposed on Muslims over their specific assets with particular conditions to specific beneficiaries.