Frequently Asked Question on Family Takaful Plans
Q: Why does SABB Takaful impose charges? What are these charges for?
A: The charges are to provide the protection benefits, the cost of administering and for managing the investments of the Takaful plan.
Q: Why do we need to pay the Participation Fee?
A: To ensure we provide you with expert advice, a professional financial need analysis and a good financial plan, we employ the services of experts in this field.
Q: I prefer to invest in mutual funds because they have lower fees/charges.
A: We agree that a good financial plan should include a diverse selection of investments. However, it should also include some protection benefits to ensure your family has adequate funds in the unfortunate event of death or disability (God forbid). This is one of the benefits of participating in a Takaful plan.
Moreover, direct investment into mutual funds usually has a minimum initial subscription of not less than SAR 7,500 and a minimum additional subscription of not less than SAR 3,750. Our Family Takaful plans have a minimum of only SAR 400 per month, allowing you to invest into these funds and strategies with a lower contribution amount.
Q: Why do I require a medical check-up to be eligible for some Takaful Plans?
A: Medical tests serve many purposes in Takaful. As participants will be grouped into a single pool, we may request some applicants to undergo medical tests, which will help in assessing the risk and the contribution to be charged. If you accept the plan after the medical test, you would have the benefit of the Company having paid the fees for these tests.
Q: Why do I need to pay my own medical fee if I cancel my plan during the cooling-off period?
A: SABB Takaful requests and pays for any medical tests to assess whether it would accept the risk and issue the Takaful plan. When clients decide to cancel their plans, they forfeit all benefits afforded by the plan, which includes the cost of the medicals completed.
Q: Are SABB Takaful plans Shariah-compliant? How can I be sure that the Shariah Committee has looked at all aspects of these plans?
A: SABB Takaful Company strives for the highest level of Shariah authentication and has a Fatwa for all products signed by three well-known Shariah scholars - Sheikh Abdullah Bin Sulaiman Al Manea, Sheikh Dr. Abdullah Al Mutlaq and Sheikh Dr. Mohammed A. Elgari Bin Eid – who make up the Shariah Committee of SABB Takaful. Each document, product and all future new products will undergo the Shariah approval process. Our Audit Committee ensures that products have the Shariah approval prior to being offered in the marketplace.
Q: How does SABB Takaful utilise the money that I contributed towards my Takaful plan?
A: Upon receipt of contributions, the cost of the protection benefits and all fees and charges are deducted. If you have an investment-linked plan, the remaining balance of the contribution, which makes up the larger share, is invested in your selected investment portfolio. The maturity benefit payable is the accumulated value of all these contributions over the period of the plan.
Q: Will the share prices affect the savings portion that is invested?
A: The fund value of the plan can be influenced by market fluctuations. However, backed by our expert fund managers, these movements are monitored and actions taken to minimise any adverse effect these may have on your fund. Nevertheless, the investment risk is still borne by the participants.
Q: Will my nominated beneficiary receive the Family Takaful benefit in the event of my death or disability (God forbid)?
A: The Takaful plan that you have signed with SABB Takaful is a legal contract. We are bound to execute claim payments in accordance with any nominations stated in the plan. In the case of any beneficiary being a minor, you can appoint a trustee such as your brother, sister or a guardian to ensure that the beneficiary receives his benefit upon becoming eligible.
Q: Why does the Board of Directors of SABB Takaful need to approve the Takaful surplus knowing the money belongs to the participants?
A: It is requirement of the Insurance Regulations that any surplus to be paid to the participants has to be approved by the Saudi Arabian Monetary Authority (SAMA). The Board of Directors has the ultimate responsibility of managing the company and ensuring compliance with legal regulations.
Q: I don’t need the additional coverage because the government provides for me.
A: Based on market studies, the benefits payable under the Government Office Social Insurance (GOSI) fulfils only part of your retirement needs. Additionally, should an employee die (God forbid) prior to his or her retirement age, there could be an even bigger gap between the GOSI payment and the actual needs of the family. Our SABB Takaful plans are designed to fill this gap to ensure the standard of living of your family can be maintained.
Q: Can I still participate in your plan even if I have one with another company?
A: Yes. You can have a plan from more than one company which will be settled at maturity or at time of a claim, within the respective terms and conditions under each one, as long as you have paid your contributions.
Q: Why is the minimum term for the range of the Family Takaful plans so long?
A: Our Takaful plans are designed to provide meaningful maturity payment to participants and to achieve this objective, the investment needs to be over a medium to longer period. However, in times of emergency cash needs, there are options of accessing the cash.
Q: Can I buy a Takaful plan for my young child even though the minimum entry age is 18?
A: You can nominate your child as the beneficiary to receive payment in the event of a claim under your Takaful plan. A trustee may also be appointed to take care of these finances should your child still be under 18 years of age at time of a claim.
Q: The monthly contribution is high. I can’t afford it.
A: Our Takaful plans are designed to provide a meaningful cash payout at maturity. However, if there are cash flow/ budget constraints, we offer you a Simple Savings Takaful Plan that has a minimum contribution of SAR 400 per month and also includes protection benefits.
Q: Can I surrender my Takaful plan before the maturity date?
A: Yes, you are allowed to surrender your plan before maturity. However, there are charges that apply if this surrender takes place during the initial stages of the plan term. The surrender value may be less than the total contributions you have paid.
Q: Can I make a partial withdrawal from my savings funds in case of needs?
A: Yes, you can make partial withdrawals from your fund of up to 50% of the fund value at the time, subject to the plan terms and conditions. The minimum amount that you can withdraw at any one time is SAR 1,000 and subject to the prevailing terms and conditions of the plan. (Please refer to the terms and conditions of the plan for full details.)
Q: How can I pay my contributions?
A: You can opt for monthly, quarterly, semi-annual or annual contribution payment, using your credit card or by directly debiting your bank account.
Q: How can I start my Takaful plan?
A: You may visit any SABB branch or call our toll-free number on800-126-0005 to arrange for an appointment with one of SABB’s Financial Advisors.
Q: How do you determine the protection amount and financial needs of the individual?
A: SABB’s Financial Advisors will assist you by conducting a full analysis of your financial situation and goals, as well as your risk appetite to establish your needs and suggest a Takaful plan to help you reach your goals.
Q: Is Takaful plan flexible enough to be changed according to my future goals?
A: Yes, all our plans offer you the opportunity to switch investment units or redirect contributions to keep your investment strategy aligned to your financial objectives, which we understand may change in the future. You can also top-up and increase your contribution at any time.
Q: Are the Family Takaful plans the same as conventional insurance plans?
A: Below is a summary of some of the main differences between Family Takaful plans from SABB Takaful and other conventional plans:
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Takaful
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Non-Takaful
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Contract
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· The contract amongst participants of the Takaful Fund is the contract of tabarru (donation, gift) and therefore is about cooperation and mutual help amongst them. The company is appointed as Wakeel to manage the fund.
· Takaful contracts are transparent |
· Contract of Exchange i.e. Sale and Purchase agreement between Insurer (the company) and the Insured upon which the insured buy and the insurer sells the policy.
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Responsibility for providing protection
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· Participants are responsible to protecting each other through tabarru’ (donation, gift).
· The Takaful operator only manages the Takaful operations on behalf of participants. |
· Non-Takaful companies, other than mutual companies, provide protection in return for premiums.
· Policyholders have no relationship amongst themselves though they contribute to the same insurance fund. |
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Surplus
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· The Takaful surplus belongs to the participants.
· A portion of the surplus is to be distributed back to the participants. |
· Any surplus belongs to the Insurer.
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Liability of the insurer/ operator
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· The Takaful operator, acting on behalf of the participants, pays claims from the Takaful Fund.
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· Insurer is responsible to pay claims from its assets (insurance funds and shareholders’ fund)
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Investment
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· All funds are invested in Shariah compliant investments
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· Funds received will be invested in both Shariah and non-Shariah investments.
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Q: Is my family protected in case I die before the end of the plan?
A: The Takaful protections benefits will be paid to your family should you die (God forbid) during the term of the plan. You can opt for additional protection by adding accidental death benefits, accidental medical expenses benefit and partial or total permanent disability benefit to your plan for a more comprehensive coverage.
Q: Why doesn’t SABB Takaful offer medical and motor insurance?
A: At the moment, SABB Takaful has not applied for the license for medical and motor insurance. There are already a large number of established medical and motor insurance providers within the Kingdom.
SABB Takaful has decided to focus on offering a range of Takaful products covering savings and protection products as well as property, accident and other lines of general insurance. These include products for children education, investment, personal accidents, travel and home and its contents protections to name a few.
However, this situation is under constant review by the management
