INS510_TUTORIAL CH04-CH05-CH06

In insurance, contract between insured and insurer based on ___

• Sale & Purchase agreement

• Profit sharing contract

• Agency contract

• Endowment contract

Major forbidden elements in insurance contract:

• Riba

• Ta'awun

• Maysir

• Gharar

Tabarru' is a _______ contract which only requires one party to express the contribution without requiring any kind of exchange.

• Unilateral

• Bilateral

• Exchange

• Intention

Takaful contract is using _____ concept

• Risk Transfer

• Risk Avoidance

• Risk Retention

• Risk Sharing

As it based on Islamic principles, Takaful is not available to non Muslims to participate.

• True

• False

Both Takaful and conventional insurance protect in the event of unforeseen events.

• True

• False

Any extra money or profit under Takaful coverage belongs to the shareholders of the insurance companies.

• True

• False

Concept of Islamic insurance based on ______, where both risks and funds are shared between the insured and insurer.

• Profit sharing

• Mutual cooperation

• Insurance coverage

• Pool partnership

Conventional Insurance involves making investments that can incur risk and generate profits that will be retained by the company, while under Takaful, Investment profits are distributed among both participants and shareholders.

• True

• False

Participant A covered his car for RM80,000 on market value and few months later, his car was stolen and at that time of loss, the car’s market value is only RM60,000. Takaful Operator will compensate Participant A with RM60,000 as he can then get a similar vehicle at RM60,000.

• Principle of Loss Minimization

• Principle of Contribution

• Principle of Insurable Interest

• Principle of Subrogation