Suchergebnisse

The Government of Malaysia wants national life insurance and family takaful penetration rate to breach 75 per cent by the end of 2020. It realises that to attain this goal, it has to raise the population's awareness of the benefits of life insurance and family takaful. Central Bank's data from 2017 revealed the life insurance penetration rate and ownership in Malaysia were discouraging. The penetration rate was reported at 56 per cent, meaning there is another 19 percentage point to cover to reach the 2020's target. Ownership level was also low as only about one-third of the populations and less than 20 per cent of adults were protected by life insurance. One explanation that links the low level for life insurance demand among Malaysians is their inability to objectively evaluate the benefits of life insurance protection. It has been suggested in the literature that a lack of financial knowledge would hinder one's ability to interpret financial information accurately. Thus, it is fair to believe that the level of financial knowledge will have a direct effect on life insurance and facility takaful awareness, and eventually the demand for life insurance products. The main purpose of the paper discusses the literature linking financial knowledge and life insurance awareness. Some suggestions on how to alleviate life insurance awareness among Malaysians are also included.

A commercial insurance contract is deemed invalid by many Muslim scholars due to the fact that it is a mu`awada (financial exchange) contract, which is overwhelmed by prohibited elements such as gharar (uncertainty), riba (interest), and maysir (gambling). As an alternative, a Shari`acompliant insurance scheme (also known as takaful) that supposedly run on the principles of mutual co-operation was proposed by the scholars and subsequently institutionalized in the late 1970s. Nevertheless, after more than 30 years, it appears that the majority of takaful operators currently exist worldwide were established as joint-stock or public limited companies (PLCs). As a result, it could be argued that the original concept of takaful was later overshadowed by the element of profit-making as observed in commercial insurance entities. This paper therefore sets out to examine those issues, which directly relate to this form of commercialisation. It argues that since the establishment of insurance companies based on commercial framework is impermissible, it could possibly affect the validity of present takaful arrangement. This study is mainly qualitative and relies greatly upon the documentation method. It is also based on afieldwork method, since the business models adopted by several takaful operators in Malaysia are carefully examined. In general, it is found that the characteristics of a commercial takaful entity may not necessarily be similar to that of its conventional counterpart.