As the appetite for family takaful grows, its underwriting principles and conventions are facing closer scrutiny. Mr Ezamshah Ismail and Dr Ahcene Lahsasna, both council members of the Shariah Advisory Council of the RGA Global Reinsurance Co Ltd Labuan Branch Retakaful Window, examine family takaful’s strengths, and how it can serve its core market while continuing to evolve to serve a broader constituency.
Shariah financial planning is the process of meeting a person’s financial and non-financial goals through a comprehensive plan and management of his property and finance based on Shariah rules and guidelines. In Shariah, a person’s wealth is not his own but held in trust for Allah. How one uses the property endowed to him determines his life in the hereafter. In financial planning, the financial goals are typically well understood; the non-financial goals are meant to fulfil one’s desire and obligation to comply with Shariah, nevertheless, they are achieved through finance, such as waqf and sadaqah (donation).
The concept of Islamic or Shariah financial planning is based on the incorporation of Shariah (Islamic law) rules and elements into the process of financial planning. Shariah rules and principles are positioned as the core of the application of financial planning, with Shariah rules and principles being observed and enforced throughout the process. Shariah financial planning may be defined as “a process of assisting clients in determining their financial goals and priorities and the resources to meet them optimally within the parameters of the Shariah.” Another definition is “the process of meeting life goals through the management of finances in accordance with the Shariah.”
