Publication: Exploring Waqf Based Takaful Fund As Financial Aid For B40 Group In Malaysia
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Date
2019
Journal Title
Journal ISSN
Volume Title
Publisher
IIUM PRESS
Abstract
Family and life takaful play an important role in providing individual financial security especially for 40 percent of households with the lowest income (B40) who are considered to be a vulnerable group in the event of financial depression. The household income for B40 is below RM3,860 per month and is expected to increase to RM5,270 in 2020 as stated in the 11th Malaysia (Economic) Plan. The importance of family and life takaful becomes more significant with increasing risks faced by the B40 such as the higher cost of living, lower savings and high indebtedness, which in turn expose this group to the risk of economic insecurity. Some initiatives have been introduced in order to help the B40 groups such as giving financial
aid to encourage them to be involved in entrepreneurship, providing special training sessions to enable them to manage their finances, and providing special takaful coverage (group takaful) for the B40. The objectives of this paper are to explore the viability of establishing a takaful fund for this target group by leveraging on the waqf model; to investigate the extent of the ownership of family and life takaful among the B40; and to identify how the waqf fund can potentially become a mechanism to initiate an exclusive takaful coverage for the B40. This research has been conducted using the qualitative method by focusing on articles, journals and library-based sources. The paper also identifies the Takaful as providing the element of savings and security to policy owners, who usually the main income earner or breadwinner, if something untoward happens and they require financial aid in the future. Besides, takaful is also presented as a savings mobilizer, financial intermediary and promoter of investment activities.
Keywords: Waqf, Takaful, B40, Investment, Takaful coverage
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Keywords
Waqf,, Takaful,, B40,, Investment,, Takaful coverage