Free Printable Comparison of Insurance and Takaful

1.

The basic concept of Takaful is the sharing of risk among participants

a)

TRUE

b)

FALSE

2.

Conventional insurance is a risk transfer mechanism

a)

TRUE

b)

FALSE

3.

Conventional insurance is free from elements of uncertainty (Gharar)

a)

TRUE

b)

FALSE

4.

Takaful is free from elements of uncertainty (Gharar)

a)

TRUE

b)

FALSE

5.

Takaful is free from elements of gambling (Maisir)

a)

TRUE

b)

FALSE

6.

Under conventional insurance, the insured pays a premium for an expectation of gains

a)

TRUE

b)

FALSE

7.

Takaful is free from the elements of interest (Riba)

a)

TRUE

b)

FALSE

8.

Under conventional insurance, the insurer must take into consideration on Shariah principle

a)

TRUE

b)

FALSE

9.

Tabarru’ is a sincere donation granted by one party by not requesting exchanges/consideration from the other party.

a)

True

b)

False

10.

An insured will undergo a personal financial loss as a result of loss. Hence, under the principle of ________________, there must a financial relatonship or ownership with the subject matters of insurance.

a)

Insurable interest

b)

Subrogation

c)

Utmost Good Faith

d)

Indemnity

11.

The four essential components of Insurable Interest may includes:

I - There must be some property, right, interest, life, limb or potential liability capable of being insured.

II - Any of these above i.e. property, right, interest etc. Must be the subject matter of Insurance.

III - The insured must stand in a formal or legal relationship with the subject matter of the Insurance. Whereby he benefits from its safety, well-being or freedom from liability and would be adversely affected by its loss, damage existence of liability.

IV - The relationship between the insured and the subject matter must be recognized by law.

a)

I & II

b)

II & IV

c)

I, II & III

d)

All of the above

12.

According to the principles of ________________, a higher standard of honesty is obligatory to the participant. A duty of disclosure that remain in force though out the entire policy duration.

a)

Insurable Interest

b)

Utmost Good Faith

c)

Indemnity

d)

Proximate Cause

13.

If a personal fails to provide the ________________, which considered as an important information to the underwriter. The participant can be considered breach the principle of Utmost Good Faith.

a)

Non- disclosure

b)

Innocent

c)

Material fact

d)

Misrepresentation

14.

________________ can be defined as security against financial loss. It's an exact financial compensation or the takaful operator will restore the financial position of a participant as before loss.

a)

Indemnity

b)

Insurable Interest

c)

Contribution

d)

Proximate Cause

15.

Transfer of legal rights on behalf of the insured; in order to recover a loss from any liable third parties are known as the principle of________________.

a)

Indemnity

b)

Subrogation

c)

Insurable Interest

d)

Contribution

16.

When there are:

· Two or more policies of indemnity exists

· The policies must cover a common interest, common peril, common subject matter and Each policy must be liable for the loss. The following are statement refers to principle of _______________________.

·

a)

Subrogation

b)

Indemnity

c)

Contribution

d)

Proximate Cause

17.

Principle of ____________ aims in putting back the insured into his or her same financial position similar before the loss occurred.

a)

insurable interest

b)

subrogation

c)

indemnity

d)

proximate cause

18.

The purpose of subrogation is to _______.

a)

protect insurer parties

b)

protect insured parties

c)

protect third parties

d)

All of the above

19.

TAKAFUL derived from an Arabic word which means joint guarantee, whereby a group of participants agree to jointly guarantee among themselves against a defined loss

a)

TRUE

b)

FALSE

20.

Insurance is necessary because...

a)

assets usually depreciate over time

b)

assets require regular maintenance

c)

assets may be damaged in the course of their use

d)

All of the above

21.

Insurance helps to..

a)

Prevent adverse situations from occurring

b)

Reduce the financial consequences of adverse situations

c)

Negate all consequences of adverse situations

d)

Make assets continuously productive

22.

Which example do you think relates to 'Insurable Interest'

a)

For something to be insured, it must have a price or financial measurement, for example a mobile phone, a tablet, a footballers legs or a car

b)

The customer must let us know all facts which could relate to this insurance

c)

The event that causes the insurance claim

d)

This principle is putting the customer back in the position they were in exactly before the insured event occured

23.

Which example do you think relates to 'Insurable Interest'

a)

Insurers expect the customer taking out the cover to have a direct financial interest in the item that they are insuring

b)

The trust that both the insurance company and the insured customer are telling the truth is referred to as this.

c)

The event that causes the insurance claim

d)

Insurance policies such as the one which we are going to be assessing claims for are these type of policies, so we don’t seek to put the customer in a better position than they were before they made the claim, but the same position

24.

Which example do you think relates to 'Insurable Interest'

a)

Usually, Insurable Interest in established by ownership or possession. Or, you would insure your own car, but not a neighbour’s!

b)

When a customer calls us to make a claim, we must deal with the customer in a totally honest way, and the customer must be honest with us

c)

Imagine a line of dominoes; the last domino in the line falling over is caused by the first domino being knocked originally. Knocking over the first domino is the _________ _______ to that chain of events

d)

We fulfil claims with replacement phones, not necessarily new phones for this reason

25.

Which example do you think relates to 'Utmost Good Faith'

a)

The customer must let us know all facts which could relate to the insurance

b)

Usually, Insurable Interest in established by ownership or possession. Or, you would insure your own car, but not a neighbour’s!

c)

The event that causes the insurance claim

d)

This principle is putting the customer back in the position they were in exactly before the insured event occurred

26.

Which example do you think relates to 'Utmost Good Faith'

a)

When a customer calls us to make a claim, we must deal with the customer in a totally honest way, and the customer must be honest with us

b)

Insurers expect the customer taking out the cover to have a direct financial interest in the item that they are insuring

c)

If a customer wishes to claim for damage of their phone, we need to understand what caused the damage? Was it water, had it been dropped or been thrown maliciously by someone else in an argument? To assess a claim we need to ask good questions to discover this

d)

We fulfil claims with replacement phones, not necessarily new phones for this reason

27.

Which example do you think relates to 'Utmost Good Faith'

a)

The trust that both the insurance company and the insured customer are telling the truth is referred to as this.

b)

The event that causes the insurance claim

c)

For something to be insured, it must have a price or financial measurement, for example a mobile phone, a tablet, a footballers legs or a car

d)

Insurance policies such as the one which we are going to be assessing claims for are these type of policies, so we don’t seek to put the customer in a better position than they were before they made the claim, but the same position

28.

Which example do you think relates to 'Proximate Cause'

a)

The event that causes the insurance claim

b)

This principle is putting the customer back in the position they were in exactly before the insured event occurred

c)

We fulfil claims with replacement phones, not necessarily new phones for this reason

d)

Insurers expect the customer taking out the cover to have a direct financial interest in the item that they are insuring

29.

Which example do you think relates to 'Proximate Cause'

a)

Imagine a line of dominoes; the last domino in the line falling over is caused by the first domino being knocked originally. Knocking over the first domino is the _________ _______ to that chain of events

b)

This principle is putting the customer back in the position they were in exactly before the insured event occurred

c)

Usually, Insurable Interest in established by ownership or possession. Or, you would insure your own car, but not a neighbour’s

d)

The customer must let us know all facts which could relate to the insurance

30.

Which example do you think relates to 'Proximate Cause'

a)

If a customer wishes to claim for damage of their phone, we need to understand what caused the damage? Was it water, had it been dropped or been thrown maliciously by someone else in an argument? To assess a claim we need to ask good questions to discover this

b)

The customer must let us know all facts which could relate to the insurance

c)

Insurers expect the customer taking out the cover to have a direct financial interest in the item that they are insuring

d)

We fulfil claims with replacement phones, not necessarily new phones for this reason

31.

Which example do you think relates to 'Indemnity'

a)

This principle is putting the customer back in the position they were in exactly before the insured event occurred

b)

Imagine a line of dominoes; the last domino in the line falling over is caused by the first domino being knocked originally. Knocking over the first domino is the _________ _______ to that chain of events

c)

The trust that both the insurance company and the insured customer are telling the truth is referred to as this.

d)

Insurers expect the customer taking out the cover to have a direct financial interest in the item that they are insuring

32.

Which example do you think relates to 'Indemnity'

a)

We fulfil claims with replacement phones, not necessarily new phones for this reason

b)

If a customer wishes to claim for damage of their phone, we need to understand what caused the damage? Was it water, had it been dropped or been thrown maliciously by someone else in an argument? To assess a claim we need to ask good questions to discover this

c)

The customer must let us know all facts which could relate to the insurance

d)

For something to be insured, it must have a price or financial measurement, for example a mobile phone, a tablet, a footballers legs or a car

33.

Which example do you think relates to 'Indemnity'

a)

Insurance policies such as the one which we are going to be assessing claims for are these type of policies, so we don’t seek to put the customer in a better position than they were before they made the claim, but the same position

b)

If a customer wishes to claim for damage of their phone, we need to understand what caused the damage? Was it water, had it been dropped or been thrown maliciously by someone else in an argument? To assess a claim we need to ask good questions to discover this

c)

The customer must let us know all facts which could relate to the insurance

d)

Usually, Insurable Interest in established by ownership or possession. Or, you would insure your own car, but not a neighbour’s!

34.

Subrogation means ...

a)

once the insurance company has given you full compensation for an item, that is all you get

b)

you cannot receive cover from multiple insurance companies

c)

you still own the asset

35.

Which of the following insurance principles states that an insured cannot be compensated by an insurance company in excess of their economic loss?

a)

Utmost Good Faith

b)

Principle of Contribution

c)

Causa Proxima

d)

Principle of Indemnity

36.

Which of the following principles of Insurance enables the insured to claim the amount from the third party responsible for the loss?

a)

Insurable Interest

b)

Reinsurance

c)

Principle of Subrogation

d)

Principle of Contribution

e)

Double insurance

37.

What is the name of the Insurance Principle which

the insured can claim the compensation either from all insurers or from any one insurer?

a)

Insurable Interest

b)

Utmost Good Faith

c)

Principle of Subrogation

d)

Principle of Contribution

e)

Proximate Cause

38.

All these elements include in conventional insurance except

a)

Al-Gharar

b)

Hibah

c)

Riba’

d)

Al-Maysir

39.

_______ is a speculative transactions that involves excessive risk and supposed to foster uncertainty and fraudulent behaviour which makes the trade similar to gambling

a)

Riba

b)

Aqad

c)

Maisir

d)

Gharar

40.

What are the features of insurance?

a)

Indemnification and frequency of losses

b)

Pooling losses and transfer of risks

c)

Payment of severity loss

d)

Pure and speculative risk

41.

what is major gharar?

a)

it is so vague that there is means of quantifying it

b)

an uncertainty which is so great that it becomes unacceptable

c)

betting or charging something that will be forfeited if one fails to obtain the greater gain that one hopes for

42.

Gharar is divided into two namely ....

a)

yasir & farid

b)

yasid & fahish

c)

yasir & fahish

43.

All the following are rules of exchange of ribawi materials except ....

a)

Materials must be of the same weight, measurement or number of units

b)

Payment must be on cash terms

c)

payment of the price and delivery of the goods are made at two different times

44.

what is riba buyu’u ?

a)

occur out of an exchange between two ribawi materials of the same kind where the necessary rule(s) are not observed

b)

the ribawi materials (of the same kind) exchanged are of different weights, measurements or numbers and they are exchanged at the same time

c)

the extra amount of money over and above the principal of the loan

45.

All the following are the major gharar EXCEPT

a)

asset or property does not exist

b)

asset or property is not free from encumbrances

c)

Price not mentioned in absolute amount

d)

It happens to the ancillary object (appendages) only (not the principal and main subject matter of contract)

46.

Riba _________ is related to the exchange of certain type of goods/commodities that involve different in counter value.

a)

Riba Al Fadl

b)

Riba Al Nasi'ah

c)

Riba Al Jahiliyyah

d)

Riba Al Duyun

47.

Ahmad lends RM250 to Yusuf with the expectation to get RM280 in return after one week.

a)

Riba al qard

b)

Riba an nasiah

c)

Riba fadl

d)

Riba al jahiliyah

48.

This type of Gharar will not invalidate a contract

a)

Gharar Yasir

b)

Gharar Fahish

49.

Gharar exists in insurance where uncertain in......

a)

Subject Matter

b)

Counter Value

c)

Premium

d)

Underwriting Surplus

50.

Riba exists in Insurance where.....

a)

Unequal exchange of two counter value

b)

Unequal exchange of investment

c)

Unequal exchange of return

d)

Unequal exchange of risk

51.

Maysir exists in Insurance where.....

a)

Paying premium without getting any amount in return

b)

Insurer gains if there are too many claimants

c)

Premium collected less than claims, Insurers could make huge profits

d)

Paying premium with equal amount in return

52.

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

a)

True

b)

False

53.

Exchanging US$105 with AUD$100 on the spot (hand to hand, without delay) is permissible.

a)

TRUE

b)

FALSE

54.

Which of the following statements is FALSE?

a)

Gharar is allowed in Islamic transactions provided one of the parties has agreed to the condition.

b)

The availability of criteria that involves betting upon the happening of uncertain future event may constitute the Islamic contract as valid.

c)

Non-muslim can take Islamic financing.

d)

Shariah requirements must be observed to ensure Islamic contract is permissible.

55.

The form of riba prohibited in the Qur’an is riba al-fadl, the exchange of superior goods with more inferior ones.

a)

TRUE

b)

FALSE

56.

While riba al-nasi’ah relates to exchange (trade), riba al-fadl relates to Debt (loans).

a)

TRUE

b)

FALSE

57.

Gold for Gold is prohibited to exchange with

a)

same (equal) amount only

b)

more amount only

c)

always prohibited

d)

none of the above

58.

What type of riba' that occurs in virtue of deferment at the time of exchange?

a)

Riba Jahiliah

b)

Riba Fadl

c)

Riba' Nasiah

d)

Riba Qard

59.

These are six (6) ribawi materials mentioned in hadith EXCEPT ..............................

a)

dates

b)

silver

c)

salt

d)

corn

60.

Riba is post-determine income, which the amount is known after the activity is done.

a)

True

b)

False

Comparison of Insurance and Takaful

Total questions: 60

Worksheet time: 45mins

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