Takaful insurance is a cooperative, community-focused method of risk-sharing rooted in Islamic finance principles where participants contribute money into a pooled fund to guarantee each other against loss or damage. Unlike traditional commercial insurance, where a corporate entity assumes all risks and keeps profits, Takaful treats participants as mutual policyholders and mutual insurers simultaneously. Any surplus funds remaining after settling claims and administrative expenses are typically redistributed back to the participants or reinvested into compliant assets.