Insurance is supposed to provide financial security to everyone, but what happens when a large section of society feels excluded due to religious beliefs? That’s where Takaful insurance comes in—an ethical, Shariah-compliant alternative that ensures protection for all.

The Philippines just took a major step forward in inclusive insurance with the launch of its first-ever Takaful insurance product in January 2025. Cebuana Lhuillier Insurance Brokers, in collaboration with Etiqa Insurance, introduced this personal accident product to cater to the Muslim community. This move not only addresses the specific needs of Muslim Filipinos but also promotes financial security for all, regardless of background.

What is Takaful, and Why Does it Matter?

Takaful is a cooperative insurance model rooted in Islamic principles of mutual assistance and shared responsibility. Unlike conventional insurance, where premiums go to an insurer who assumes the risk, Takaful pools contributions from participants into a shared fund. This fund is used to support those who suffer losses, ensuring transparency and fairness. Simply put, it aligns financial security with ethical values.

Why India Needs to Take Notes

India is home to over 200 million Muslims (nearly 15% of the population) and the third-largest Muslim population in the world. Yet, despite the size of this community, there is very little awareness and availability of Takaful insurance in the country. As India pushes forward with its ‘Insurance for All by 2047’ mission, it’s crucial to recognize that a one-size-fits-all approach won’t work. If financial inclusion is truly the goal, then Takaful needs to be part of the conversation.

The launch of the Philippines’ first Takaful insurance product (a Takaful personal accident product) is a perfect example of how insurance companies can step up to meet the needs of a diverse population. If a nation like the Philippines, where less than 10% of the population is Muslim, can recognize the demand for Shariah-compliant insurance, why is India still lagging behind?

The Benefits of Takaful in India

1. Financial Inclusion – A significant number of Muslims in India avoid conventional insurance due to religious concerns. Takaful can bridge this gap by offering an ethical alternative.
2. Market Expansion – With such a large untapped market, insurers can significantly expand their customer base by offering Takaful policies.
3. Trust and Transparency – Many individuals, regardless of religion, prefer financial products that prioritize fairness, shared responsibility, and transparency. Takaful aligns with these values.
4. The 2047 Goal – If India aims for universal insurance coverage by 2047, embracing inclusive policies like Takaful is a step in the right direction.

A Call to Action for the Indian Regulator and Insurers

Indian insurance companies should take inspiration from Philippines and introduce and marketing Takaful options. The demand is there—it’s just a matter of stepping up and providing products that cater to it. It’s not just about the Muslim population; ethical insurance models like Takaful can benefit everyone by promoting fairness and financial security.

If the Philippines can do it, why can’t we? The time for change is now!

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