Takaful works on the basis of an agreement established by the Participants of the Takaful program. By purchasing insurance, each Member certifies that they are one of the insured. Each pays a premium to the program, which is invested in recognized instruments and utilized to pay out claims. A Takaful corporation, for instance, cannot invest in ventures involving interest, alcohol, gambling, or unpredictability. The scheme’s participants share in the earnings from the approved investments.

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