The Concept of Islamic Insurance

According to the National Sharia Council Fatwa No: 21/DSN-MUI/X/2001 on General Guidelines for Islamic Insurance, Islamic Insurance (Ta'min, Takaful, Tadhamun) is defined as a mutual protection and assistance effort among a group of individuals/parties through investments in the form of assets and/or tabarru (charitable donations) that provide a scheme for returns to address specific risks through contracts that comply with Sharia principles.