Application of khiyār (option) in the free-look period of takaful contracts: a Malaysian legal and shariah analysis

Razali, Siti Salwani and Abdul Sabian, Nur Arfifah (2026) Application of khiyār (option) in the free-look period of takaful contracts: a Malaysian legal and shariah analysis. IIUM Law Journal, 34 (1). pp. 267-290. ISSN 0128-2530 E-ISSN 2289-7852

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Abstract

Takaful is a contract whereby the participants commit to contribute an amount of money on a regular basis or in one lump sum into a specified fund to mutually guarantee each other in the event of misfortune. The Takaful company is appointed as a fund manager to manage the fund according to mandate given by the participants. Takaful is a type of contract whereby Takaful participants have the opportunity to mitigate possible financial risk that their families might encounter in case of misfortune. However, there may be instances in which participants change their minds and decide to withdraw from the takaful contract for personal reasons, particularly in the early stages of the contract. This practice is commonly understood in the industry as a free-look period. From the Shariah perspective, this practice seems similar to khiyar (option) in Fiqh Muamalat (a branch of Islamic rulings which deals with trade and business). However, there is a lack of legal and shariah analysis of free-look periods, which this paper aims to contribute. Hence, this paper will study the practice of the free-look period in the takaful industry by examining its relation according to legal perspectives and its connection with khiyar (option) in Fiqh Muamalat. The research found that the most suitable types of khiyar applicable in Free Look Period is Khiyar Al-Shart and the study will compare these principle of khiyarbetween Shariah Law and Malaysia Takaful Law and practice. In terms of methodology, this study is doctrinal legal research and Shariah research and uses the content analysis method. Reference was made to the provisions in various Takaful and consumer-related statutes in Malaysia, and relevant case laws. This research also consists of library-based research on which the researcher refers to published books, articles, circulars, statutes and other relevant resources such as current industry practices from takaful operators in Malaysia.

Item Type:	Article (Journal)
Uncontrolled Keywords:	Khiyar, Option, Takaful, Free Look Period, Cooling-Off Period
Subjects:	BPK Islamic law. Shari'ah. Fiqh H Social Sciences > H Social Sciences (General)
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Business Administration
Depositing User:	Dr Siti Salwani Razali
Date Deposited:	22 Sep 2026 10:57
Last Update:	22 Sep 2026 10:57
Queue Number:	2026-09-Q5175
URI:	http://irep.iium.edu.my/id/eprint/131367
Indexed In:	WOS Core Collection, Google Scholar, MyCite

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