This article is part of a helpful series explaining Takaful terms.
Today, we’re focusing on the term Hibah, so that you understand what it means and how it relates to our EZTakaful plans.
Hibah is an Arabic word that traditionally referred to a gift, such as money, which was given to someone without expecting anything in return.
The concept of Hibah is an important part of Islamic financial companies.
Through Hibah, a financial company is able to provide money to a member without expecting the member to do anything for the company in return beyond their contract. For example, Hibah allows Takaful operators to provide plan benefits in the form of money to their members or to someone in a member’s family designed as a plan “beneficiary.”
Let’s take a closer look at how Hibah works within our EZTakaful plans.
When you sign up for an EZTakaful plan, we enter into a contract to provide you or your beneficiary with cash benefits under certain conditions. These benefits can be made as Hibah because our plans provide money to you or your beneficiary if certain events occur, without requiring you or your beneficiary to give us anything in return afterwards.
Under Hibah you have the right to choose the beneficiary who will receive the benefit money provided by our EZTakaful plans. Hibah also allows you to change your beneficiary, if the person you choose passes away. In addition, our Takaful Certificates specifically mention that benefits will be distributed in accordance with Shariah Inheritance Law, which deals with Hibah.
We hope this information about Hibah helps you understand how we ensure that our that our EZTakaful plans are Shariah compliant.
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