Choosing your car insurance in Malaysia can be confusing, especially for first time-users. The common confusion would be whether we should be using Takaful or conventional insurance?. Both are valid for roadtax renewal, However, they differ in certain aspects such as concept, structure & benefits. This guide will assist you in making an informed decision knowing the difference between takaful vs conventional insurance.
Takaful Insurance, What is it?
Takaful is Shariah compliant insurance. Participants would contribute to a common fund which then will be used by other members if an accident occurs. This concept is borne from mutual assistance(ta’awun) and is interest free (free of riba)
Key features:
- Shariah Compliant and approved by the council of Shariah Advisory
- Fund is shared among participants.
- Surplus may be redistributed back to participants.
Conventional Insurance, What is it?
Typically Conventional insurance follows a business model. You pay a premium to the insurer, and the company takes on the financial risk.
Key features:
- Not Shariah-compliant.
- Premiums are seen as a “transfer of risk.”
- Profits stay with the insurance company.
Comparison between Takaful vs Conventional Insurance
| Aspect | Takaful | Conventional Insurance |
| Concept | Mutual assistance, Shariah compliant | Business model, not Shariah-compliant |
| Fund | Shared by participants | Controlled by the company |
| Surplus | Redistributed to participants | Kept by the company |
| Suitability | For Muslims & non-Muslims | For all drivers |
| Price | Generally similar | Generally similar |
Factors to Consider for Takaful vs Conventional
- Religious Preference – If Shariah compliance matters, Takaful is the clear choice.
- Cost – Both can be compared with the different benefits they provide.
- Extra Benefits – Both types offer Roadside assistance and also provide for additional perks
- Customer Experience – Different customers, different experience. There are even non-muslims who prefer Takaful over conventional.
Conclusion
Both Takaful and conventional have their advantages. If faith-based compliance is a priority, Takaful is the way to go, or you can opt out for conventional insurance that also provides legal coverage. The only thing that matters is making sure your policy is active so you’re able to renew your roadtax drive off without worry.
Read More:
Insuran Komprehensif & Renew Roadtax Online – Platform Terbaik
