Journal Article

Towards a Suitable Micro-Takāful Plan in Malaysia: Benefits and Coverage Preferences of Low-Income B40 Groups

Maamor, Selamah, Wahidah Shari, Nurul Aini Muhamed, Ahmad, Shahrul Nizam, Mohamad Yazid Isa, Asmadi Mohamed Naim, Sofi, Mohd Fikri

2025

Overview

Purpose–This paper explores the required types of benefits and coverage amount for mico-takaful from the perspectives of the bottom 40 percent of households income (B40) against their demographic profiles. Findings – The findings reveal two distinct categories of coverage amounts preferred by respondents: RM5,001–RM10,000 for essential coverage and RM50,000–RM100,000 for more comprehensive protection. Additionally, the results highlight that preferences for benefits and coverage amounts vary significantly across demographic groups, with younger respondents favouring lower coverage due to affordability, and older respondents prioritizing higher coverage for long-term security. Research limitations/implications – This study focuses on consumer preferences, with limited attention to supply-side challenges faced by takaful providers. Future research should include a more representative sample, explore provider constraints, and consider longitudinal studies to capture evolving preferences. Additionally, the use of cross-tabulation limits the analysis to basic associations. Advanced methods are recommended for deeper insights. Practical implications – The findings offer actionable insights for takaful providers in designing micro-takaful products tailored to the specific needs and financial capabilities of the B40 group. By aligning product offerings with customer preferences, takaful providers can enhance product adoption and contribute to improved financial security among the underserved population. Originality/Value — This paper addresses a critical gap in the literature by examining micro-takāful benefits and coverage preferences from the customers’ perspectives. It offers a fresh understanding of customer needs, enabling takāful providers to design products that better resonate with the B40 income group. Research Limitations/Implications — This study focuses on consumer preferences, with limited attention to supply-side challenges faced by takāful providers. Future research should include a more representative sample, explore takāful providers’ constraints, and consider longitudinal studies to capture evolving preferences. Additionally, the use of cross-tabulation limits the analysis to basic associations. Advanced methods are recommended for deeper insights. Practical Implications — The findings offer actionable insights for takāful providers in designing micro-takāful products tailored to the specific needs and financial capabilities of the B40 group. By aligning product offerings with customer preferences, takāful providers can enhance product adoption and contribute to improved financial security among the underserved population.

• Publisher: International Shari'ah Research Academy for Islamic Finance (ISRA)
• Subject: Consumer behavior / Financial services / Longitudinal studies