MEDICAL TAKAFUL SUBSCRIPTION

BEHAVIOR: MOTIVATIONAL FACTORS

FOR PEOPLE IN RURAL AREA
MUHAMMAD SYAMIL BIN IBRAHIM
G 1621855
INTRODUCTION

■ Medical Takaful policy is very vital component for individual or family financial
management. A more affluent nation has generated a stronger demand for better
healthcare services and medicinal products, resulting in higher healthcare costs.
Due to the rising of living cost, medical inflation will give a direct effect to people in
managing their money. People in the rural area is among those affected by the high
of the chronic disease medical cost particularly those living in Setiu. Hence, the
study will observe the motivational factors that may influence subscription behavior
of people in rural areas in subscribing to the Medical Takaful plan.
PROBLEM STATEMENT

■ There is a low level of market penetration and awareness on the significance of

Medical Takaful thus prompt this research to contribute to observe what factors
motivates people in rural areas to subscribe to Medical Takaful whereas only 4% of
lower income households have some form of life insurance or family takaful cover
(The Star, 2018)
SIGNIFICANT OF THE STUDY

■ This study will help the Takaful Operator to organize and formulate the idea strategy
to penalize the market in particular in rural area in Setiu.
RESEARCH OBJECTIVE

■ 1) To identify the motivational factors that influence people in rural areas to

subscribe to the medical takaful

■ 2) To observe the order of importance of each factor to people in rural area in

Setiu that motivates them to subscribe to Medical Takaful.
RESEARCH QUESTIONS

■ 1. What are the factors that motivate people in rural area in subscribing the Medical
Takaful?

■ 2. In what order of importance, does each factor influence people in rural area
decision to subscribe to Family Takaful?
TAKAFUL
■ The word Takaful is derived from the Arabic verb "kafala" which simply means to take
care of one's need.
■ Section 2 of the Takaful Act of Malaysia 1984 de nes takaful as “a scheme based
on brotherhood, solidarity and mutual assistance which provides for mutual nancial
aid and assistance to the participants in case of need whereby the participants
mutually agree to contribute for that purpose.”
■ Bank Negara Malaysia (BNM) (2005) defines this concept as each participant
fulfilling his/her obligation by contributing a certain amount of donation (or tabarru’)
into a fund.
■ There are two types of takaful:
– General takaful
– Family takaful
■ Malaysia’s takaful insurance has significant opportunities for growth as its
penetration rate is still low at 5.2% of gross domestic product (GDP) (Malaysian
Takaful Association chairman Ahmad Rizlan Azman).
FAMILY TAKAFUL
■ Family Takaful plans are generally used for family solidarity in place of conventional
life insurance which provides protection, long-term savings and an investment
instrument.
■ Redzuan, Rahman & Aidid (2009), three main factors ofIslamic life insurance are:
– to save over a fixed period of time and contribute a certain amount of money to
a Takaful fund
– to earn returns on contributions from investment in Syaria compliant
instruments,
– to receive protection in the event of death to the participant prior to the
maturity of the plan.
 REVIEW OF MAIN LITERATURE
Author (Year) Objective of the study
Syafiq & Rusni (2017)
Identify what motivates
Generation-Y (Gen-Y), as the
largest segment of the
population in Malaysia, to
subscribe to Family Takaful.
Shukri (2012) The study aims to propose a
conceptual framework for the
determinants of family Takaful
demand in Malaysia.
Highlight of the study
Significant positive responses from Gen-Y toward each
motivating factor indicates that they accept the Family
Takaful industry and its practices, Family Takaful
products, individual financial position and religious
factors influence their decision to subscribe to Family
Takaful.
There are two categories of factors that are found to
be the main determinants of family Takaful. These
factors are the socio-demography and economic
factors.
 CONT…
Author (Year) Objective of the study
Sheila and Syazwani Examine the viability of micro- • It was noted that the poor people are interested to
(2014) health takaful in Malaysia.
Current practices in the
takaful industry in Malaysia
reveal that takaful operators
(TOs) are keen on offering
products that are affordable
for middle- to high-income
people. However, the concept
of takaful is based on mutual
help, and, hence, it is believed
that TOs should offer products
affordable by the poor and
lower income people.
Highlight of the study
participate in such a scheme. However, most of
them are only willing to contribute about RM5 per
month, while some of the respondents, especially,
zakat recipients are unable to afford to pay at all.
• It could be summed up that micro-health takaful
will be viable if and only if TOs collectively offer it as
a part of their corporate social responsibility, and it
must be subsidized by the zakat or waqf
authorities.
 CONT…
Author (Year) Objective of the study
Zarulnaim (2018) Examine the level and the
relationship between the
perception of the performance
of takaful operators and the • The findings concluded that a positive moderate
customers’ intention in using
medical takaful card among
public sectors in Kedah,
Malaysia.
Highlight of the study
• The review found that the level of customers’
perception of performance towards the customers’
intention in using medical takaful card was high.
relationship was observed between the perception
of the performance of takaful operators and the
customers’ intention in using medical takaful card
among public officers in Kedah, Malaysia.
THEORETICAL FRAMEWORK
ATTITUDE

■ Muhammad and Osman (2014), attitude towards behavior is an individual’s positive

or negative perspective about carrying out a particular behavior.
■ Azjen (1991), attitude is defined as the psychological tendency that is expressed
from favorable and unfavorable evaluation on a particular entity.
SUBJECTIVE NORM

■ Chiou (1998) Subjective norm is defined as the effect of people whose opinions are
valued by an individual and how their opinions affect said individual behavior.
■ Armitage and Conner (2001), subjective norm is a weak predictor of behavioral
intentions.
PERCEIVED BEHAVIORAL CONTROL

■ Azjen (1991), Perceived behavioral control refers to the impact a person’s resources,
time, skill set or any other opportunity has on them to perform certain behaviours.
■ Azjen (1991), There are two components that are concerned; the first being
financial resources and the second being self-confidence.
INTENTION

■ Fishben and Azjen (1975) define intention as a subjective probability to carry out a
behavior.
■ Azjen (1991) human intentions is guided by three factors behavioral beliefs,
normative beliefs and control beliefs.
■ Mohammad and Osman (2014), the intention of a character at the appropriate time
and or opportunity, is said to actualized said into behavior.
RELIGIOSITY

■ McDaniel and Burnett (2009), the values derived from religious beliefs and the
commitments or practices thereof, undeniably reflect upon the attitudes or social
behavior of an individual.
■ Koenig (2000) observes religion to be a system created in order to assist closeness
to God or to foster understanding of the relationship between individual and their
responsibility towards the community.
METHODS AND PROCEDURES

■ RESEARCH DESIGN
– The research will be using questionnaires as it is common method used to
measure the various variable in this study.
■ RESEARCH INSTRUMENT
– The research instrument used is a questionnaire.
– The questionnaires are designed to examine the relationship between the
attitude, subjective norm, perceived behavioral control, religiosity and intention.
– The data collected is to be analyzed using Statistical Package for Social
Sciences (SPSS) software.
CONT…

■ DATA COLLECTION
– This study will utilize the probability sampling technique, particularly random
sampling method, with specific geographical location.
■ SAMPLE POPULATION
– People live in Setiu
– About 300 respondents from people in Setiu will be randomly select to
adequately conduct the study and fulfill the research objectives.
THANK YOU