PruBSN launches peer-to-peer khairat fund

by LYDIA NATHAN / source: PruBSN

PRUDENTIAL BSN Takaful Bhd (PruBSN) launched PruBSN Aman — a digital app that combines Takaful aspect, peer-to-peer (P2P) concept and mutual assistance — with the aim to providing a simple but transparent protection and khairat benefits.

The app — a joint effort between PruBSN, MyAngkasa Mukmin and the International Centre for Education in Islamic Finance (Inceif) — will feature a unique concept whereby the more participants joining the community, the stronger the protection force becomes.

PruBSN CEO Wan Saifulrizal Wan Ismail (centre) said the product will require a simple online registration and RM120 for an advanced contribution payment.

“From this amount, RM30 will be charged for an upfront wakalah fee, and the remaining RM90 will go into a mutual account and will only be deducted to help pay for the cost of death claims, if death occurs among the participants,” he said at the PruBSN Aman virtual launch yesterday.

According to Wan Saifulrizal, the launch of PruBSN Aman is timely as the adoption and usage of digital and contactless transactions have been accelerated greatly this year due to the pandemic.

“The app is a step change in empowering mutual protection and mutual assistance by making takaful and funeral services more inclusive, transparent and affordable for everyone.

“Death is inevitable and can strike anytime, so we want to ensure ease and peace of mind for our customers and their families during their most difficult time,” he said.

Wan Saifulrizal said this product is different from the regular insurance or takaful products in three main ways, including how it operates which is P2P.

“This means that everyone comes in to help each other, and e-money belongs to the participants. If no death happens, there is no deduction. Secondly, this service and facility is to provide ease of mind in case death happens, where we also work with MyAngkasa Mukmin, an established funeral service provider.

“Third, it is very transparent in the sense that all participants can view the financial statements, number of participants, number of deaths, and the cost and the balance on a monthly basis,” he said.

Inceif Associate Prof Dr Magda Ismail Abdel Mohsin (left) said the rise in funeral cost has resulted in emerging awareness of the need to plan.

“The khairat fund traditionally managed by the mosque is sustained via contribution from the community in the area where some are already facing challenges in managing the expenses incurred.

“Through its digital P2P approach, PruBSN Aman can reach a wider segment which helps ensure better governance and sustainability of the scheme in meeting the objectives of what the khairat fund sets out to achieve,” she said.

Meanwhile, Wan Saifulrizal said the entry age is between 19 and 65 years old, and PruBSN Aman will pay a death benefit worth RM7,000 to the nominee, while RM3,000 is to be paid to the funeral service director should the next of kin make that option.

“The coverage expiry is up till 70 years of age and nominees can submit the death benefit claims remotely via the app.

“Anyone wishing to opt out of this plan can do so any time and will receive the remaining balance from the mutual account,” he said.