While Takaful serves the same functional purpose as conventional insurance by providing financial protection against unforeseen risks, its underlying structural, legal, and ethical frameworks are fundamentally different. Traditional insurance operates on a commercial exchange contract where risk is transferred to a profit-seeking corporate entity. Conversely, Takaful operates on cooperative principles of mutual donation, shared responsibility, and prohibition of interest, meaning policyholders collectively protect one another rather than transacting with a traditional insurer.