Tabarru'
Tabarru' is a voluntary donation. In takaful, it is the part of each participant's contribution that is donated to the shared risk fund, from which claims are paid to any participant who suffers a covered loss.
Also called: tabarru · donation contribution · takaful donation
The donation is what turns a pooled risk fund into something other than an exchange of premium for a promise. Because each participant gives rather than buys, the uncertainty about whether any individual will recover more or less than they paid is not treated as the gharar of a sale. Participants are, in effect, mutually agreeing to help whichever of them suffers loss.
In a typical takaful contribution, part goes to the operator as its fee, part is tabarru' to the risk fund and, in family takaful, part is saved in the participant's own investment account.
In practice
Tabarru' is not a premium in the conventional sense. It belongs to the participants' fund, not to the operator, and any surplus left in that fund is not the operator's profit.
Commonly confused with
| Term | How it differs |
|---|---|
| Sadaqah | Sadaqah is charity given for the benefit of others with nothing expected back. Tabarru' in takaful is a donation to a pool the donor also belongs to and can claim from. |
See also
- TakafulTakaful is a cooperative risk-sharing arrangement in which participants contribute to a common fund that pays claims among them, run by an operator under a Sharia-compliant contract rather than sold as conventional insurance.
- RetakafulRetakaful is the Sharia-compliant counterpart of reinsurance: it lets takaful operators pass part of the risk carried by their participants' funds to a larger pool, so that a single large claim does not exhaust them.
- SadaqahSadaqah is voluntary charity: giving of any amount, at any time, to anyone in need, beyond the fixed obligation of zakat and without expecting repayment.
- GhararGharar is excessive uncertainty or ambiguity in the essential terms of a contract — the subject matter, the price, the delivery — of a kind that can make one party's gain depend on the other's ignorance.