Mathematical Modelling in Family Takaful

Clients at least knew if they paid a certain amount of money every month to an insurance company, they got back their money plus more if accidents or deaths happened. However, they have no idea about the inner workings or the fine prints of the insurance transactions. Compared to the other forms of insurance, Family Takaful Insurance without doubt should be the first choice of future clients. This research paper emphasized on mathematical modeling of Family Takaful and compared the mathematical part of the analysis using LM1 and LM2. According to the goal of this research, researchers have to calculate the life table premium from Takaful Companies which used mudharabah model and wakala model. To achieve this purpose, researchers have to derive a suitable formula for such life tables and compared between these two models would be on Surrender value, Maturity value and Death coverage. The results had shown that clients would be better off if they had chosen a takaful company that sold the mudharabah model and not the wakala model.