Public Awareness, Understanding and Attitudes towards Interest-free Insurance (Takaful) Services Evaluation by Education Level: Survey Based on Empirical Analysis for Turkey

Abstract

Islamic scholars raise different opinions and views on modern insurance practices. Some hold that private insurance services and instruments serve as assurances that are allowed under Islamic law, whereas some others oppose this view arguing that there are serious doubts on their compatibility with Islam. Islam does not allow interest-based approaches and practices in the economic field; for this reason some Muslims are cautious vis-a-vis insurance services. Reactions by scholars to the insurance practices and implementation do not eliminate the needs of Muslims who want to regulate their daily lives by the Islamic tenets. Those who hold that conventional insurance practices are not compatible with Islam stress that there could be an alternative to this practice that would also be compatible with Islamic law. There are some versions of the companies created to address such concerns in Iran and Malaysia. Such institutions are pretty rare in countries such as Turkey, where Islamic finance receives little attention. For this reason, the study analyses the Takaful practices in Turkey and measures public awareness on this new practice. The results of the survey are tested empirically and some insights are offered accordingly.