What is a Takaful Fund?

A Takaful Fund is a fund that is set up on the principles of cross subsidization to compensate participants of the fund who have suffered losses as a result of defined perils. A Takaful fund is recognized as a separate juristic entity and in the case of Capital Legacy, this fund has been structured on the principles of Waqf.

Accordingly, participants contribute to the fund on the principles of cross-subsidization and are compensated in case of perils faced according to the rules of the fund. Funds lying in the Takaful fund are generally invested on a Shariah Compliant basis using various investment avenues. The fund is managed by a management company for a pre defined fee. The overall functions of the fund are monitored by independent trustees.