Takaful Vs Insurans

Some of us might be interested to know what is the differences between Takaful and Insurance.

Below is the simplified diagram to show the differences. The main difference is the impact on the economic circular flow. As seen below, the Takaful model promotes a continuous flow of income wheareas Insurance model is preventive. 

During my study at Universiti Malaya, I have chosen to answer question no 4 which is the differences between Takaful and Insurance. Main motive was to share this knowledge with everyone and of course for my personal interest.

We were given only 2 days to complete the essay. Although it may not be a highly critical and sophisticated numerical research, I hope it could provide a rough idea on the differences between these two contracts for those who are keen.

The below link is the essay which I have wrote:

Comparison Essay Takaful vs Insurance

We are required to write the essay in Bahasa Melayu. Hence for those who are interested to know more about this product in English, kindly refer to my main source Takaful Report 2011 Ernst & Young as below:

Takaful Report 2011 Ernst & Young

I am currently using MAA Takaful. At the moment, they are the best as there is no co-insurance fees to be paid. All hospitalisation charges are paid as charged while the other insurance contracts apply the co-insurance of 10% of the total medical bills. This can be vouched through my personal experience when I have to do endoscopy. I am not required to pay a single cent. Normal Insurance policy such as Great Eastern, Prudential, etc. will have cost me RM500 = 10%.

Takaful is indeed the best.