Takaful vs Conventional Insurance

Takaful’ is a form of co-operative insurance. In Arabic, takaful means ‘solidarity’.

Based on the concept of shared contributions and mutual co-operation, Takaful Emarat does not charge interest. Instead, it provides regimented subscription and pooled compensation to protect members in case of loss.

Conventional Insurance involves making investments that can incur risk and generate profits, which are, in turn, retained by the company. Takaful however ensures that no one member can gain an advantage at the expense of another creating a cooperation among policyholders for the common good of all members.


Contributions are paid by participants, as a donation to a shared Takaful fund, providing protection for each member against combined risks and sharing surplus equally.

Surplus is distributed back to members as a renewal discount.

Participants ‘accounts and shareholders’ accounts are kept separate.

Investment profits are distributed among both participants and shareholders on the basis of Mudaraba or Wakala models.

If there is a deficit in any Participants’ Fund, Shareholder Fund provides an interest-free loan (Qard Hasan) to the Participant/s.

Takaful Emarat adheres to both UAE law and an appointed Shariah Supervisory Board.

Capital is only invested in funds that are fully Shariah compliant.