Operational Flow of Long-term Family Takaful Products
- Participant pays contribution under the scheme.
- Depending on the model adopted by takaful operator, the contribution will be devided into:
- Wakalah Fee (applicable for wakalah model);
- Participants 'Account; and
- Participants' "Risk Account" also known as "Participants Special Account".
The allocation between WF, PA, PRA is based on the pre-agreed ratio as specified in the contract.
- WF that consists of commission and management expenses will be paid to the shareholders.
- The PA fund an excess in PRA after deducting operating expenses will be invested in assets mainly as follows:
- Government Islamic instruments;
- Islamic private debt securities and equities;
- Fixed assets; and
- Cash and invesment accounts.
- Invesment profits, if any, will be distributed between the takaful operator and the fund (participant) in the from of profit-sharing and performance fee based on the pre-agreed ratio between takaful operator and participant. The amount PA will be accumulated and paid to the participant upon death, surrender or maturity.
- The amount in PRA will be used to pay claims, retakaful and reserves.
- Surplus in PRA at the end of the year (after deducting claims, retakaful and reserves) will be distributed to the takaful operator and the participants. The distribution of surplus will be based on the pre-agreed ratio as stipulated in the contract.
- Shareholders will use the WF and invesment profit (for mudharabah model) to pay for operating expenses.