What is Takaful?
Takaful is the term which is used to describe an insurance arrangement which is in compliance with Islamic principles or more specifically the Shariah. The concept was implemented in Malaysia with the introduction of the Takaful Act 1984. Now superseded by the Islamic Financial Services Act 2013 
The Act defines Takaful as:
‘An arrangement based on mutual assistance under which takaful participants agrees to contribute to a common fund providing for mutual financial benefits payable to the takaful participants or their beneficiaries on the occurrence of pre-agreed events‘
It is therefore effectively means that it is an arrangement of mutual help among members of a group who pool their efforts to support the needy amongst them.
According to Malaysian Takaful Association:
‘A portion of participant’s contribution for the purpose of mutual help and used to pay claims submitted by eligible claimants‘ 
The effect of the tabarru’ concept is that, it is the members of the group (or participants) who bear the risk and not the takaful operator. The operator is said to be the custodian of the funds.
Managing it for the benefit of the members. These concepts are consistent with the general principles of Islamic teaching which emphasise the importance of brotherhood among members of the community
- Module 2: Insurance Planning and Estate Planning, Finanical Planning Association Malaysia
- Malaysian Takaful Association