A Shari'ah compliant Unit-linked product is a Family Takaful plan that combines investment and Takaful coverage. This product is known in conventional insurance as investment-linked insurance. It is defined as a life insurance that combines investment and protection.
As far as Shari’ah compliant Unit-linked product is concerned, the contributions of the participants will be divided into two parts. One part is to serve protection where a particular portion of the contribution will be treated as donation to the fund. This portion is used to help the participants that need it most, as in the case of death or disability. The other portion of the contribution goes into buying investment-linked units.
The customers are given the chance to choose which Shariah approved investment funds they want to invest in. The investment-linked units are then managed by the Takaful operator, who in return receives a fee for the service. If, during the period of Takaful, no claim was made, the participants will receive a share of the surplus in the Takaful fund, based on the pre-agreed ratio with the Takaful operator. Each share of the surplus will be used to purchase additional investment-linked units.
Unit linked products provide the benefits of risk protection and flexibility in investment. They offer attractive features such as flexibility to choose your investments, transparency of charges and liquidity in case you incur a large unexpected cost. You have the option of managing your own investment through selecting your own investment strategy to meet your specific life stage requirement and risk profile.
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