The Islamic Protection for your Family (Takaful in Pakistan)


Takaful in Pakistan

Pakistan is a golden sparrow for its minerals and others reservoirs. To stabilize economy of Pakistan government is in a process to reshaping the economy to meet the global financial market’s challenges. Pakistani government has formed many regulations to introduce takaful in the country where conventional insurance has taken place in 1972 after the merging of 32 companies in one called state life of Pakistan.

Foundation of takaful in Pakistan

Sudan is the pioneer Islamic country who established first takaful company in 1979. Since its inception, many Islamic countries have started its efforts to implement such Islamic rules and regulations which may support the establishment of takaful industry. Government of Pakistan took a step in this regard and ordered the state bank to make feasibility for the introduction of Islamic banking and takaful. in 2003, a collective gathering(Ijtima) of all religious schools of thought has taken place in Jamia Darul Uloom Karachi, where all aspects of takaful and Islamic banking rules and regulations has been discussed to check the permissibility of takaful and Islamic banking in Pakistan.

That meeting was ended after making sufficient changes in rules and regulations to permit the Islamic banking and takaful in Pakistan. At early stage, it is permitted on some basic rules including that Islamic banking will only be allowed if it will be separate from conventional banking and takaful will be allow only when all its contributions will be managed separately from conventional insurance and all its contribution will be invested in shariah compliance Islamically allowed businesses where no gambling (Qimar), interest (Usury) and uncertainty (Gharrar) will involve. A Wakala-Waqf model was introduced by a religious scholar for takaful operation in Pakistan.

Government Stance

On the bases of above recommendations, Government of Pakistan, in 2005, passed a rule to regulate takaful operators in Pakistan. Government of Pakistan issued a first ever takaful license to a company in 2006 for general takaful implementation in Pakistan. Dawood Takaful was the first company who got life takaful license from government in 2006. In 2007, Pak Qatar takaful company was the first company who got both takaful licenses (general and life) and started its business in Pakistan. Later on many other takaful operators has started their working in Pakistan but all have only the general takaful’ licenses.

Wakala Waqf Model

Wakala Waqf Model is being in use for takaful in Pakistan which is an enhancement in Wakala model. In this model, a pool is created known as Waqf which ownership is given to ALLAH (SWT). The ownership of this pool cannot be transferred to any other person. This pool is used for charity purpose and for the risk mitigation among its members. When a person joins takaful company, a little percentage of his/her contribution is donated to Waqf pool. In case of member’s death or dismemberment Waqf pool contribute the earliest decided amount to member’s family or member itself in case of dismemberment.

The remaining contribution of members is invested in shariah compliance halal businesses after the deduction of operator’s fee which varies from company to company. Invested amount in various business returns profit/loss to the members. In long term a handsome amount has been generated from these businesses and handover to the members after the maturity of membership.

Takaful operator works as an advocate (wakeel) who manages accounts, Waqf fund & investment fund, on behalf of member, and deducted its operating fee and other administrative charges.


Pakistan is expecting 15%-20% takaful market growth for the upcoming 10 years time period, currently it has $4.7 billion contributions by takaful members approximately. Takaful is a good risk mitigation opportunity for those who want to secure their family’s financial stability for future needs like after retirement life, children higher education, their marriages etc.