The effect of IFSA 2013 on late payment of takaful benefits

Pages: 106
Year: 2017


This publication is part of the journal (2017-2)


– This paper aims to examine the implications of compensation on late payment of takāful benefit
imposed in the Islamic Financial Services Act 2013 on the takāful industry in Malaysia. It also aims to identify
the issues and challenges faced by takāful operators in the implementation of the compensation and propose
solutions for the benefits of the takāful industry.
Design/methodology/approach – This research uses the qualitative approach to understand the
practices of claims in takāful and to analyze the implication of compensation on late payment of takāful
benefit to the takāful industry in Malaysia. Data are collected through survey and interview with various
takāful stakeholders.
Findings – Some of the key findings in this research are that the compensation of late payment of takāful
benefit has a positive impact to the takāful industry. The research also found some Sharīʿah operational
issues in terms of its implementation among takāful operators.
Research limitations/implications – The research focuses on compensation on late payment of takāful
benefit claim in death and personal accident only.
Practical implications – The research offers certainty to the takāful industry and an explanation to
academic and legal fraternities on the implementation of compensation on late payment of takāful benefit
according to Islamic Financial Services Act (IFSA) 2013.
Originality/value – The research provides a valuable contribution to the current practices of takāful
operators, identifies some issues and challenges of its implementation and proposes the solution.
Keywords Takāful benefit, claim, late payment, IFSA 2013
Paper type Research paper
Introduction
Buying a life insurance policy is an important financial planning tool that is widely used to
protect against financial loss which would result from the premature death of the insured
person. Many people die prematurely from illnesses and accidents, with devastating
consequences for their families, who are left to pay funeral expenses and outstanding debts
and find it difficult to maintain their standard of living. A life insurance policy provides
death benefits if the policyholder dies within the tenure; otherwise, it makes available
maturity benefits if the policyholder survives the policy term. The life insurance death
benefits can only be paid subject to the beneficiary’s submission of a death claim to the
insurer.


 



 

 

 


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