Takaful is not optional on MFLC's Islamic home financing

The application form for MFLC Maal's home financing includes this commitment: the borrower agrees to take takaful cover for the property for the whole tenure, from their own funds, and to share the policy with Maldives Finance and Leasing Company (MFLC).

What takaful is

Takaful is the Islamic form of insurance. Policyholders contribute to a shared fund, and claims are paid from it. In a home financing it does the job buildings insurance does in a conventional mortgage. If the home is damaged, the cover protects both your share and MFLC's.

Why it is compulsory

Under Musharakah Mutanaqisah, MFLC co-owns the home until you have bought its share. A lender that owns part of a property needs it insured for as long as it does. That is why the form requires cover for the whole tenure, not just the first year.

What it means for your budget

• The premium is yours to pay, on top of the monthly rent and purchase payments.
• It continues every year until the financing ends: up to ten years with MFLC.
• MFLC must be shown the policy, so check it names the property correctly and covers the full value MFLC requires.

Questions to ask

1. How much cover does MFLC require: the financing amount, the property value, or the rebuilding cost?
2. Which takaful providers does MFLC accept?
3. Who holds the policy, and what happens to a claim payout while MFLC still owns a share?
4. What happens if a renewal is missed? Ask whether MFLC insures the property and charges you, and at what cost.

MFLC's conventional Home Loan page does not state an insurance requirement, but its form asks whether the property is insured and for how much. Ask MFLC whether cover is required there too.

As published by MFLC on 18 October 2026. MFLC does not publish its rates; ask for them in writing. General information, not financial advice.