The Objectives of Sharīʿah in Nomination for the Payment of Family Takaful Benefits

Publication Date26 Aug 2019
AuthorSafinar Salleh,Akmal Hidayah Halim,Uzaimah Ibrahim,Mohamad Asmadi Abdullah
Chapter 3
The Objectives of Sharīʿah in Nomination
for the Payment of Family Takaful Benets
Sanar Salleh, Akmal Hidayah Halim, Uzaimah Ibrahim and
Mohamad Asmadi Abdullah
A family takaful certicate is subscribed by a takaful participant for the
purpose of preparing nancial support for his dependants after his death.
The takaful benets could then be made payable to a nominee named as
the beneciary under conditional hibah (gift). In this respect, the partici-
pant is free to decide to whom the benets are to be given since the law is
silent as to the criteria of the beneciary. This situation gives rise to the is-
sue on whether such a practice fulls the objectives of Sharīʿah, especially
when the nominated beneciary is not the sole dependant of the deceased
participant. Therefore, this research aims to evaluate the status of family
takaful benets, analyse the rules of conditional hibah from the Sharīʿah
perspective and propose solutions whenever necessary. The research adopts
doctrinal analysis by examining existing primary and secondary materials
including statutory provisions and other legal and non-legal literatures.
The study predicates that the application of conditional hibah to the whole
benets does not reect the objectives of Sharīʿah if determination on the
status of the benets is solely based on the nomination made by the par-
ticipant. It is observed that takaful benets payable from the Participant’s
Account should be considered as the deceased’s estate and must be dis-
tributed according to fara’id or Islamic law of inheritance. Conversely, the
sum covered payable from the Participant’s Special Account may be paid
to the deceased’s dependants whose criteria are determined by the Sharīʿah
Advisory Council as the highest authority in Islamic nancial matters.
Keywords: Family takaful benets; conditional hibah; nomination; fara’id;
dependants; objectives of Sharīʿah
Emerging Issues in Islamic Finance Law and Practice in Malaysia, 33–51
Copyright © 2019 by Emerald Publishing Limited
All rights of reproduction in any form reserved
34 Sanar Salleh et al.
Family takaful is one of the Islamic nancial instruments that could full the
maqasid al-Sharīʿah (objectives of Sharīʿah). A family takaful certicate sub-
scribed by a takaful participant will provide takaful benets that could serve as
the means of maintenance of his dependants after his death, especially if he is
the breadwinner of the family. In 2003, the Sharīʿah Advisory Council (SAC) of
the Bank Negara Malaysia (BNM) resolved that the benets could be made as
a conditional hibah (gift) to a nominee named as the beneciary in the takaful
certicate (Sharīʿah Advisory Council of Bank Negara Malaysia, 2010). This
resolution was later codied in the Islamic Financial Services Act (IFSA) 2013.
The Act does not specify the individual to be nominated as the beneciary, thus
the participant has full liberty to decide to whom the benets are to be given. In
spite of the approval by the SAC, the position of such nomination has stirred
debates since the position of the benets is merely based on the nomination made
by the participant. Paragraph 6(2) of Schedule 10 of the Act stipulates that if
the nominee is named as an executor, the benet would be part of the estate of
the deceased participant to be distributed in accordance with his will or the law
applicable to the administration, distribution and disposition of his estate upon
his intestacy. However, if the participant opted to name the nominee as a ben-
eciary under conditional hibah, the benet would not then be considered as his
estate but would absolutely belong to the nominee despite the existence of other
dependants who might also be in need of the money.
The application of conditional hibah to the rule of nomination for the pay-
ment of takaful benets draws certain legal issues that are still debatable from the
Sharīʿah point of view. Among the issues that have been discussed in the exist-
ing literature (Abdullah & Abdul Aziz, 2010; Ahmad & Borhan, 2017; Bakar,
Zahid, & Markom, 2014; Ismail, 2009; Mohd Noor & Abdullah, 2009; Salman,
2014) are (1) the status of nomination under conditional hibah, (2) the status of
hibah which is conditional upon death whether it is to be construed as a hibah or
wasiyyah (bequest) and its legal effect, (3) the status of takaful benets whether
they are part of the estate of the deceased participant which should be distrib-
uted according to fara’id (the law of inheritance) and (4) the parties that are
entitled to receive the takaful benets as the beneciary. Nevertheless, no study
has discussed the application of conditional hibah to the rules of nomination
from the perspective of maqasid al-sharīʿah. Therefore, this study aims to analyse
the achievement of the objectives of Sharīʿah through the application of condi-
tional hibah in nomination for the payment of takaful benets under IFSA 2013.
This analysis is important to ensure that the application of conditional hibah in
nomination of beneciary under a family takaful certicate does not merely full
the legal requirements in a mechanical and procedural sense, but its application
should also achieve the objectives of Sharīʿah.
This chapter is divided into six sections. The introduction is followed by a
discussion on the objectives of Sharīʿah in family takaful. The next section out-
lines the rules of nomination provided under IFSA 2013. The status of takaful
benets in Islamic law is discussed in section four followed by an analysis of the

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