Saturday
15th Aug 2026
Dhivehi Edition
Unexpected death can leave families facing significant financial difficulties, particularly when the deceased has outstanding loans and the family is left responsible for meeting the repayments. Allied Takaful’s Debt Protection Takaful plan is designed to settle the outstanding debt in such circumstances, helping protect the borrower’s family and assets.
Under the plan, if the participant dies unexpectedly while the certificate remains in force, Allied Takaful will pay the amount specified in the certificate to the relevant financial institution toward repayment of the outstanding debt.
The certificate is taken by the borrower, or participant, and the contribution can be paid either as a lump sum when the certificate begins or at intervals permitted under the plan.
The value of the certificate decreases each year and reaches zero when the certificate matures. For each year, the covered amount corresponds to the outstanding debt at that time. The participant assigns the certificate to the financial institution as collateral security while continuing to repay the loan through equal monthly instalments.
If the participant dies during the certificate period, the outstanding amount specified in the certificate is paid to the financial institution, allowing the debt to be fully settled. Once the debt is cleared, the bank can release the mortgaged property to the participant’s family, leaving the family or heirs without the burden of the outstanding loan.
Allied illustrates the plan using the example of a 30-year-old man named Mohamed who borrows MVR 300,000 from a bank after mortgaging his house. He takes a Debt Protection Takaful plan for the same amount as collateral security and repays the loan through equal monthly instalments.
If Mohamed dies at the age of 35, the outstanding debt specified in the certificate would be settled with the bank. The bank would then release the mortgaged house to his family, meaning the debt would not be passed on to his family or successors.
According to Allied, applicants are required to provide a copy of the participant’s ID card, a sanction letter documenting the financial facility between the bank or financial institution and the borrower, and the full contribution payment. A medical report may also be required depending on the circumstances.
The contribution can be paid in cash, through BML Bill Pay or by bank transfer, according to the information provided for the plan.
Allied currently lists Debt Protection Takaful as one of its Family Takaful products, describing it as a plan intended to protect families by repaying a borrower’s debt through the certificate proceeds in the event of the borrower’s death.