Application of Umra and Ruqba in Disbursement of Family Takaful Benefit: An Analysis From Shariah Perspective

Abstract

The paper aims to analyse the validity of practicing umra and ruqba concepts in disbursement of family takaful benefit from the shariah perspective. In the current practice of takaful, the disbursement of family takaful benefit is subject to the demise of takaful certificate holder. Upon maturity of the certificate, if the certificate holder is alive, he will enjoy takaful benefit but not the beneficiary or hibah recipient. Accordingly, he takes back the donation that he made earlier, which makes the arrangement contentious, as long as the Islamic value is concerned. To resolve this issue, the paper suggested that the takaful benefit could be disbursed based on umra and ruqba concepts as they are subject to the survival of the contracting parties. Umra and ruqba are valid provided that once the donation is executed, the donated object should never be returned to the donor. These concepts are appropriate for takaful because the beneficiary can enjoy takaful benefit only when the certificate holder dies before the maturity of certificate. Once the certificate holder dies, takaful benefit cannot be provided to him. The paper argues that the application of umra and ruqba concepts minimises the consequential issues that arise when takaful benefit is Md. Habibur Rahman et al. 108 disbursed by nomination or inheritance or absolute hibah. Analysing the opinions of the classical Islamic jurists, the paper concludes that the application of umra and ruqba in disbursement of takaful benefit could be done with a structured checklist form.

The application of hibah al-ʿumra in disbursement of family Takāful benefits: an exploratory study

“…Hence, the proceeds will never return to the certificate holders as they are already dead. In this case, a certificate holder may say, “I am donating the benefits of my Takāful certificate as hibah al-‘umra to so and so, subject to my death and his/her survival upon my demise” (Rahman et al , 2019; SS#1, 2021).…”

“…Later, Rahman et al (2018), in their analytical study on hibah al-'umra and ruqba in Islamic law, examined the possibility of their applications to solve the ownership and hibah issues of the family Tak aful benefits and suggested considering these types of hibah as the underlying ground for the survivorship principle in the joint tenancy arrangement. In a similar work, Rahman et al (2019) have thoroughly examined the prospect of applying hibah al-'umra and hibah alraqba principles and concluded that there is an enormous potential for applying these concepts in the disbursement of Tak aful benefits with a structured checklist form in IMEFM 16,1 policyholders' underwritings. However, all these previous works were theoretical and did not include any empirical study.…”

Streamlining the Nomination Policy in Estate Administration for Muslims in Malaysia

“…15 The application of conditional hibah in takaful has also been discussed by Md. Habibur et al 16 However, the authors in both articles did not discuss the effect of nomination for other nomination-based products such as the Pilgrimage Fund and Insurance and Employee's Provident Fund nor discuss the possibility of streamlining the nomination policy for all the nomination-based products. Therefore, there is a need to study the possibility of streamlining the nomination policy in Malaysia.…”