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The Principles and Practices of Shariah in Islamic Finance - page 23 / 49

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Takaful contribution as separate

expenses

33. Alternatively, the two parties may negotiate to exclude Takaful contribution from the cost and be charged separately.

Illustration 6: Inclusion of Takaful Charges for Murabahah Financing

An IFI finances a customer for the purchase of a property valued at RM250,000 at a mark-up of 10% per annum for a period of 10 years. Hence, the Murabahah selling price is RM500,000 if a straight-line method of calculation is used. In addition, the customer is required to insure the property against fire as well as to take up a Mortgage Reducing Term Takaful (MRTT). Both parties agreed that the Takaful contribution shall be paid separately by the customer to the Takaful operator via the IFI. The contribution paid to the Takaful operator for fire insurance and MRTT shall be additional costs borne by the customer in addition to the selling price.

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