Comprehensive Mortgage Takaful
How does HLM Takaful-CMT plan provide the coverage for the various perils?
The HLM Takaful-CMT is a single contribution plan.
In the event of Death or TPD, a reducing Takaful benefit payable from the Risk Fund. The paid amount is expected to match the outstanding mortgage . HLM Takaful-CMT also has a special feature where Certificateholder or your nominee will be paid on any excess from the accumulated Participant's Fund.
In the event of damage caused by fire or named perils during the coverage period, HLM Takaful-CMT plan provides Takaful benefit. The payable amount will be made from Risk Fund to the Master Certificateholder or to participant (if financing is completely settled). The named perils include explosion, impact damage by road vehicles or animals, flood, windstorm, aircraft damage, bursting or overflowing of domestic tanks, apparatus or pipes et cetera.
Exclusions to the Takaful coverage
The Death or TPD benefit shall not be payable if the death is due to or arising from suicide or attempted suicide and/or other causes prohibited by civil and criminal laws and/or by Shariah. Under such circumstances, only the value of the Participant's Fund at the time of death will be payable.
No benefit shall be paid if the TPD is due to AIDS, strikes, riot, war, aerial activity other than as a fare paying passenger of a scheduled air flight or the influence of intoxicants.
For fire and the named perils coverage, benefits will not be paid if the loss or damage is caused by war, mutiny, riot, acts of terrorism and other specified events.
How is Participant's contribution allocated?
An upfront wakalah fee will be deducted from the single contribution made by the Participant. The wakalah fee goes into the Operator's fund to cover operating costs. The balance of Participant's single contribution will go into savings accounts (Participant's Funds) from which periodic donations (tabarru') will be made into the Risk Funds.
How will the contribution in the Participants' Fund and Risk Fund be invested?
Both funds will be invested in compliance with Shariah principles, the investment profits (in case of Participant's Fund, after deduction of the Operator's share) shall be kept in the respective funds.
How are surpluses, if any, from the Risk Fund treated?
Any surplus exceeding reserves deemed necessary by the Operator may be donated to charities selected by the Operator as advised by the Operator's Shariah Advisory Committee.
The Operator will provide a temporary benevolent loan (Qardl Hasan) to ensure continued solvency of the Risk Fund to pay the benefits. This loan will be repaid in time from the emerging surpluses that may arise in the Risk Fund in subsequent periods.
What happens if the Risk Fund is insufficient to pay for the benefits?