59 IJIBEC Do Funeral Funds Managed by Informal Institutions Comply with Microtakaful Principles? Achmad Firdaus1, Erwita Triana Dewi2, Ratna Komalasari3 Institut Agama Islam Tazkia1, Institut Agama Islam Tazkia2, Padjadjaran University3, email: achmad.firdaus@tazkia.ac.id1, Erwita.Dewi@bni-life.co.id2, ratnakomalasari11@gmail.com3 Abstract Research on funeral funds on a homeowner association has never been performed before. Meanwhile, previous studies on the funeral fund in insurance companies, 'rukun kematian,' and mosques are used as a reference. The research aims to analyze whether the funeral funds managed by informal institutions correspond with the micro takaful principle. Method is a descriptive analysis is used by comparing the survey in two groups, namely residential and village areas, of 31 communities spread across Java Island. The research variables developed include calculation, collection method, and amount of funeral fund contribution, alongside the calculation and amount of benefits. Although the funeral funds' variables have not fulfilled the micro takaful principle, there are interesting findings. These include that the calculation of contribution for the two groups, namely the residential and village areas, is performed by mutual agreement through community deliberations. In the village, the collection method is by direct payment from members of the public to the officers, which is different from the residential areas, where it is picked up by the officers. Furthermore, the amount of funding contributions to the community in the villages is around Rp. 3.001 and Rp. 5,000, while the total is over Rp. 10,000 in residential areas. The informal funeral funding scheme (IFFS) has become a mutually beneficial culture of Indonesian society, which fosters strong humanity and brotherhood. This scheme can be formulated in micro-takaful cooperatives to ensure that the benefits trickle down for every member of the community, including Muslims and non-Muslims. International Journal of Islamic Business and Economics Available at http://e-journal.iainpekalongan.ac.id/index.php/IJIBEC ISSN 2599-3216 E-ISSN 2615-420X Vol 5 No 1 2021 Keywords: Micro Takaful, Funeral Fund, Informal Mirco Takaful. DOI:https://doi.org/10.28918/ijib ec.v5i1.3574 JEL: I1, R2 Article Info Article History: Received : 17 March 2021 Accepted : 25 May 2021 Published : 1 June 2021 mailto:achmad.firdaus@tazkia.ac.id mailto:Erwita.Dewi@bni-life.co.id mailto:ratnakomalasari11@gmail.com https://doi.org/10.28918/ijibec.v5i1.3574 https://doi.org/10.28918/ijibec.v5i1.3574 60 International Journal of Islamic Business and Economics (IJIBEC), 5(1) June 2021, 59 - 70 1. Introduction In the event of death, the family runs the risk, including the costs of arranging the remains, funeral, post-burial, and living expenses for the persons left behind (Holbert, 2002). The cost of handling comprises bathing the body, which includes buying shroud, boards, and others, while the burial costs entail caring for the funeral, paying grave burrows, transportation, etc. (Dercon et al., 2006). After the funeral, some Indonesian people hold a prayer between families and neighbors, and this activity also requires money, as does the living expenses for families left behind, such as tuition fees, and other related costs. According to Woodthorpe et al. (2013), closer attention needs to be paid to the issue of financial support for funerals, the limited amount of literature, and the mortality rate, which increases simultaneously with the elderly population. Meanwhile, research from South Africa showed that funeral costs are a huge expense for poor households (Roth, 2001), as the households in the study spent about 15 times the average monthly income. Hougaard & Chamberlain (2015) also noted that the high cost in this country is due to the belief that funerals are a dignified activity and should be given priority, hence, including food and transportation for the attendees. LII (2007) stated that South African participants do not go through a medical examination process for the insurance funeral fund products, and the companies can apply a waiting period of up to six months for the benefits of natural and not accidental death. Meanwhile, a delay of the premium paid due to financial difficulties does not result in a cancellation of the policy. A policyholder yet to pay is given one month, and the grace period is extended by a month for each valid year, with a maximum of six months for policies longer than one year. Roth (2001) explained that the funeral fund in Africa is provided through a non-profit scheme that features Rotating Savings and Credit Associations (ROSCA). In Malaysia, the fund is provided by the mosque council to cover expenses and benefits related to the funeral of Muslim family members (Ismail et al., 2019) and is a part of the al-khairat scheme. Conversely, managing funerals and death funds can be a family business in the US, and the methods and management offered are more professional and scalable (Austin, 2018). Funeral funding in Indonesia is provided by either government, private, informal institutions, or the family. Meanwhile, the management of funerals is usually performed by families of people who die on family-owned burial grounds. The government provides burial management through the regional or central division on grounds owned by them. Hence, the management and tariffs relating to funeral costs are controlled by the local or central government regulations. Conversely, the burial grounds offered by private parties is owned by domestic property companies, which also regulate the management and funeral. Table 1 shows the funeral costs incurred by the private sector in Indonesia and the data, shows the high cost of caring for corpses. Table 1. Funeral Costs by Government and Private Parties Name of Funeral Management Kind of Management Cost of Funeral San Diego Hills Private Rp 37 million – Rp 1.4 billion Al Azhar Memorial Garden Private Rp 43.5 million – Rp 929.2 million Raudhatul Jannah Private Rp 39.1 million – Rp 209.7 International Journal of Islamic Business and Economics (IJIBEC), 5(1) June 2021, 59 - 70 61 million Dinas Pemakaman Kab. Bogor Governmen t Rp 630 thousand – Rp 2.1 million Dinas Pemakaman Kota Bogor Governmen t Rp 1.2 million (average) Dinas Pemakaman Kota Depok Governmen t Rp 500 thousand (average) Source: processed from various sources, 2020 Subsequently, the local government social services set the provisions regarding the types and amounts of benefits from funeral funding offered by them. The compensation for death is in a Regional Regulation (PERDA), which includes Kediri (Kediri Mayor Regulation, 2020), and Gresik (Regulation of the Regent of Gresik, 2017). Others are Padang (Regulation of the Mayor of Padang, 2015), Tulang Bawang (Regulation of the Regent of Tulang Bawang, 2018), South Tangerang (Regional Regulation of the City of South Tangerang, 2018). Funeral funding can also be provided by social security or informal micro-insurance (Roth, 2000; Hougaard, C, and Chamberlain, D, 2011). These schemes can subsequently be categorized as micro-takaful, which is defined as an alternative to micro-insurance services with an Islamic contract for an underprivileged community. It is born from a mutual agreement to help (ta'awun) in recovering from the risks of loss or certain calamities that befall the community (Jaenudin et al., 20018). The main benefit of Micro takaful in its implementation is executing Allah's religion ى َعاَل َ ت َو ُ ه َ by manifesting ta'awun in virtue and piety. These are meant to bring good ُسْبَحان fortune to the Muslim community and safety from the ugliness and consciousness of the individual roles and responsibility. Consequently, ta'awun for an ummah is a manifestation of personality and the foundation in fostering the life of the people (QS Al-Ma'idah, 5: 2). Ibn Kathir explained that Allah Ta'ala asked His servants who believed to always help one another in righteousness, through the term, al-birru, meaning benevolence, and to leave all forms of reneging, through at-taqwa. A form of al-birru is helping families or relatives that are overwritten by the ordeal through death. Meanwhile, the practice of micro takaful involves giving financial advice and benefits to society. Whoever leaves advice to his brother and abandons him is, in essence, a deceiver and not their defender, as a consequence of loyalty is advising and helping in virtue and piety. Hence, ta'awun in micro takaful entails realizing the consequences of wala '(loyalty) by Muslims, according to Allah's word ى َعاَل َ َو ت ُ ه َ .(QS Al-Tawbah, 9: 71)ُسْبَحان The management of funeral funds has been implemented by almost all homeowner associations in Indonesia, making it interesting to observe, with the underlying reason for their existence being that poor families require help in the event of death. Meanwhile, RT / RW management is the first party to receive reports from residents and needs a death compensation assistance scheme. They work together to raise funds for financing funeral expenses, which may be collected weekly or monthly. Funeral funds managed by RT / RW aims to help residents and are one of the ta'awun management practices used to help the community (Jaenudin et al., 2018). The scheme is managed by RT / RW, according to Allah's orders, which urge people to work together or ta’awun in virtue and piety and forbid mutual worship in sin and hostility. Previous studies on the management of funeral funds by informal institutions include Ismail et al. (2019), Prasojo et al. (2017), Asrifah (2013), Jirhanuddin et al. (2016). Ismail et al. (2019) researched the practice of funeral fund (al-khairat) managed by mosque 62 International Journal of Islamic Business and Economics (IJIBEC), 5(1) June 2021, 59 - 70 administrators in Selangor state, Malaysia. Some of the variables observed were member size, benefit schemes, marketing, and investment, using a research sample of 20 funds. Subsequently, almost all the al-khairat funds were discovered to have been operating for more than 10 years with membership sizes of 100 to 700 participants and an average of about 500. Additionally, Prasojo et al. (2017) researched the practice of managing ta'awun funds at the Al-Hijriyah Mosque in Kerobokan Village, Badung Regency, where each member pays a fee of Rp 100,000/KK/year to the manager. The study had a more varied magnitude and method compared to the findings in the “Rukun Kifayah Kerobokan (RKK).” The form of contribution was determined by deliberation and was consistent with the RKK case study findings. Compensation for funerals can be claimed through submission to the “Rukun Kifayah Kerobokan” head, and the benefits cover the costs for bathing, covering, and praying. The study found that the form of compensation provided could be money, groceries, body equipment, or rice, and the RKK reports management transparency every three months. Therefore, funeral funds are managed by informal institutions, as well as the Al-Hijriyah Mosque in Kerobokan Village (Prasojo, et al., 2017). This scheme was named “Rukun Kifayah Kerobokan” (RKK) and they explained that the management had not routinely made reports regarding compensations for death. Furthermore, Asrifah (2013) researched funeral funds managed by an insurance company, PT. BNI Life Insurance, which handles death benefits, with various planning options for 1, 3, and 6 months. The members subsequently receive death benefits along with the profit obtained from the investment returns of B'life Wadi'ah. Also, Jirhanuddin et al. (2016) conducted similar research on an informal institution, called "Rukun Kematian." The scheme aims to ease the burden on the heirs in managing bodies, funerals, and administrative arrangements in local governments. The study discovered that Rukun Kematian does not fully apply the principles of ta'awun during the distribution of compensation. This community organization applies the principle of a 3- month waiting period. Then, the members receive benefits after 3 months of membership, while those that experience the risk of death during the waiting period cannot obtain compensation. However, this is against the principle of providing help or ta'awun. This research differs in several ways compared to previous studies, particularly Ismail et al. (2019) and Prasojo et al. (2017), which were conducted on the operators of funeral fund management, namely mosques. Research by Ismail et al. (2019) was performed on mosques in Selangor, Malaysia, Prasojo et al. (2017) in Kerobokan Village, Badung Regency, and Jirhanuddin et al. (2016) on Rukun Kematian. Research by Asrifah (2013) was performed on formal funeral fund management, specifically insurance companies. Meanwhile, this study aims to analyze how the concept of funeral fund scheme as part of micro takaful is carried out by the homeowner association. Funeral funds managed by the homeowner associations certainly have many differences. They are motivated by the diversity of Indonesian customs and cultures, as well as the financial capacity of the group. Therefore, these differences in habits, culture, and environment are reasonably suspected to result in differences in the management of funeral funds in villages and residential areas. Studies on the appropriateness of the RT / RW funeral fund management for the implementation of the ta'awun fund, as well as the differences and similarities between residential and village areas, are important for residents. The management of the body is "Fardhu Kifayah" and this is important for RT / RW administrators to understand. International Journal of Islamic Business and Economics (IJIBEC), 5(1) June 2021, 59 - 70 63 Based on the background, this research aims to analyze whether the funeral funds managed by informal institutions in residential and village areas correspond with the micro takaful principle. The problems to be resolved are calculation, collection method, and amount of contributions of the funeral fund, alongside the calculation and amount of benefits. 2. Method This research uses comparative and descriptive methods to conduct a causal analysis of the factors that cause the emergence of a phenomenon (Baumgartner et al., 2011). The comparative study is performed without a hypothesis, and the most striking feature of this research form is that the incident under investigation is already happening. Hence, it traces back the chronology of the events being examined to find a causal relationship, such that the generation of predictive answers indicates belonging to the hypothesized comparative study. Conducting a comparative study begins with defining the research problem, followed by a literature review, and the formulation of assumptions to perform the basic procedures of comparative studies. Then, the subjects and relevant data sources are chosen, and the collected data are compiled and classified, according to the study purpose. These categories are formed by exploring the nature, relationships, or similarities of the research object data. Finally, the data is ready to be analyzed, validation techniques are performed, and the analysis is carried out. Subsequently, the study used a random sampling technique with the sample of households in the two regions represented by a questionnaire that was submitted to the head of the RT / RW or community leader in charge of managing the neighborhood funeral funds. Meanwhile, primary data was collected through questionnaires, by taking a sample representing the homeowner associations of residential and village areas as the scope and the smallest community structure. Then, Google form questionnaires were uploaded on the link https://forms.gle/61fqdAJsJjimYHoE7 and distributed through WA groups, email, Facebook, and other social media platforms. The questionnaire was answered by the chairman of homeowner associations or officials with authority. Data was also collected through notes and audio recordings to simplify and support the processing and analysis, while the sample collection was for 1 month period from 12 June to 12 July 2020. To obtain the expected amount of data, this study used Slovin's random sampling with the formula: Furthermore, the population included all the RT / RW and community leaders in Java Island, with an expected sample size was 84, while the collected data was processed via the description and stratification. The description was performed to describe the questionnaire results, which were further analyzed through a narrative, and the stratification was by grouping the interview data results according to the village and residential areas. 3. Result and Discussion With a target of 84 samples, this study managed to collect data from 31 respondents, https://forms.gle/61fqdAJsJjimYHoE7 64 International Journal of Islamic Business and Economics (IJIBEC), 5(1) June 2021, 59 - 70 meaning 37% of the target was covered. Although the number did not meet the target, it was better than previous studies, as research by Prasojo et al. (2017) used 1 sample, which Al-Hijriyah Mosque, Kerobokan Village, North Kuta District, Badung Regency. Asrifah (2013) and Jirhanuddin et al. (2016) also used 1 sample each, comprising PT. BNI Life Insurance Jakarta and RKM Puntun, Palangka Raya, respectively, while Ismail et al. (2019) utilized 20 samples from Mosques in Selangor state, Malaysia. The data collected was processed and analyzed by dividing the two groups, namely the residential and village areas. This was unlike previous research by Prasojo et al. (2017), Asrifah (2013), Jirhanuddin et al. (2016), and Ismail et al. (2019), which did not perform a comparative analysis of these two communities. Subsequently, the respondents' residences were 62%, 15%, 14%, and 9% living in West Java, DKI Jakarta, Banten, and East Java, respectively. The East and South areas of DKI Jakarta comprised 50% of the respondents each, while the West Java region consisted of 45%, 20%, and 5% in Bogor, Depok, and Garut, respectively, alongside 15% each in Bandung and Bekasi. Furthermore, the East Java region was composed 33% in Gresik and 67% in Malang, while Banten comprised 25% in Pamulang and Serang each, alongside 50% in Tangerang. The data showed that 49% of the respondents lived in residential areas, while 51% were village residents. a. Calculation of contribution According to Figure 1, 72% of the respondents in the village had calculations of the contribution and 28% did not, while 47% from the residential area had them and 53% did not. The data above shows that there was a predominant method of calculating funeral fund contribution in the management of RT and RW in the village. However, this number does not yet indicate that the literacy of this management in the calculation process. Figure 1. Calculation of funeral fund contribution Sources: processed data Table 2 shows the data of the village area respondents of the contribution calculation, where a proportion of 56% explained that it used a mutual agreement at a community meeting. Conversely, 25% proposed the RT and RW management meeting, then determination at a meeting of all residents, while the remaining 19% chose the meeting of residents only. Conversely, 47% of the residential area respondents that answered had contribution calculations, where 53% explained that it employed mutual agreement at a community meeting. However, 33% chose the proposal at the RT and RW management meeting, International Journal of Islamic Business and Economics (IJIBEC), 5(1) June 2021, 59 - 70 65 followed by determination at a meeting of all residents, while 13% selected the meeting of all residents. Table 2 also shows that the determination of contribution calculations is made through community meetings in both areas, with 53% and 56% outcomes for the resident and groups. This fact shows that calculating contributions of funeral funds are not through actuarial techniques but via an agreement with the deliberation method, as stated by Prasojo et al. (2017). Table 2. Method of Funeral Fund Calculation Method Resident Village 1 Agreement at a neighborhood meeting 53% 56% 2 Proposing at the RT and RW management meeting, then determining at a meeting of all residents 33% 25% 3 Meeting all residents 13% 19% Sources: processed data b. Collection method of funeral fund contribution The predominant method of funeral fund contribution in residential areas was performed by officers, at a proportion of 65%, 29% was handed over by community members, while 6% were positioned in a place and picked up. However, this third method of contribution was paid with rice and not cash. Conversely, direct payment of the contribution by the community members to the officers was dominant in the village area and performed by 67%, 28% was picked up, while the remaining 6% was kept in front of the house to be picked up by the manager. This finding shows that officers actively collect funeral funds from community members in residential areas, which differs from village areas, where the members actively visit the officers. This visitation habit corresponds with the study by Prasojo et al. (2017), where the participants came to the RKK head to pay contributions. Meanwhile, there is a common tradition in both residential and village areas, involving the collection of the funeral fund by the officer after placement in a mutually agreed site, usually in front of the house. The contribution is usually in the form of rice rather than cash. Subsequently, this finding is different from previous studies by Prasojo et al. (2017), Asrifah (2013), Jirhanuddin et al. (2016), and Ismail et al. (2019) who found that the payment was solely in cash. Furthermore, 34% of the residential area respondents stated that the amount of rice was not determined, while 33% each gave answers of as much as 1 cup and between 501 grams -1 kg. Conversely, 43% in the village area stated that the amount was more than 1kg, 29% responded that it was voluntary, while 14% each stated 1 glass and between 251 -500 grams. This data shows that the villagers are predominantly able to pay funeral funds with rice weighing more than 1 kg/month, whereas the residential area respondents give rice contributions without any provisions. c. Amount of contribution fund The payment in residential areas was predominantly more than Rp 10,000, as stated by 66 International Journal of Islamic Business and Economics (IJIBEC), 5(1) June 2021, 59 - 70 59%, and Rp. 3,001 - 5,000, according to 24%. However, 6% each paid below Rp. 3,000 and between Rp. 7,501 - 10,000, while the remaining 5% paid the contribution voluntarily. In the village, 55% of the respondents gave between Rp. 3,001 and Rp. 5,000, 17% between Rp. 7,501 - 10,000, 11% offered more than Rp. 10,000, while the remaining 17% was voluntary. This data shows that residential areas pay more funeral funds than the villages. There were differences in the ability to pay contributions, as the residential communities had more capabilities than the rural areas. The contribution paid by the residential community was equal to that of the ‘Rukun Kematian’ members at IDR 10,000 / month (Jirhanuddin et al., 2016). It was almost similar to that by RKK members at IDR 100,000 / year (Prasojo et al., 2017). Meanwhile, the highest contribution of funeral funds was Rp 10,000/month or Rp 120,000/year, which was below the contribution managed by mosques in Selangor. According to Ismail et al. (2019), more than 50% of al-khairat contributes RM 50/year or an equivalent of Rp. 176,000/year. The lowest contribution was 26% by Rp. 3,001 –5,000 or an equivalent of Rp. 36,012- 60,000 / year. This amount was much smaller than the contribution managed by mosques in Selangor, which was RM25 / year or equivalent to Rp. 88,454.5. Although the difference between Malaysian and Indonesian contributions and benefits is relatively high, this study did not include the purchasing power parity variable. Hence, the comparison has not been able to capture the benefits provided by the respective amounts of contributions and benefits. Furthermore, the collected funds were entirely for benevolence and funeral expenses, and this finding corresponds with the al-khairat fund management in Selangor, where there is no investment policy. Al-Khairat or charity funds, which can also be part of social insurance for the sick, are managed by the mosque committee and any member who wants coverage is asked to voluntarily contribute (Ismail et al., 2019). d. Calculation of funeral fund benefits About 59% of the residential area respondents predominantly have calculations of the funeral fund benefit, while the remaining 41% do not. Conversely, 83% of the village have calculations of the benefits, while 17% do not, showing that this community possesses greater understanding in calculating the benefits of the funeral fund compared to residential areas. However, this amount does not show that the RT and RW management in the village has literacy in this calculation process, as indicated by the respondents.' The analysis showed that 54% of them use the 'deliberation with the RT / RW management' method. Conversely, 33% apply the 'proposed at the RT and RW management meeting, followed by determination at the residents,' while 13% employ the 'meeting of all residents' method. This finding corresponds with studies by Prasojo et al. (2017), where the determination of funeral fund benefits was by the RKK manager, as well as Asrifah (2013) by insurance management. However, it differs from Ismail et al. (2019), where three mosques were shown to have criteria for determining benefits, according to the takaful principle. In residential areas, 56% employed the 'proposed at the RT and RW management meeting' method, 25% used the 'proposed at the RT / RW meeting and determined through community meetings,' while 19% applied the 'determined at the meeting of all residents.' Consequently, the data showed that agreeing on the funeral fund benefits through a meeting of the RT / RW management as the determining party is sufficient for the village International Journal of Islamic Business and Economics (IJIBEC), 5(1) June 2021, 59 - 70 67 and residential areas. e. Amount of funeral fund benefit The amount of funeral fund benefit received by the heirs in the village area was dominantly between Rp. 500,000 - 1,000,000, as stated by 50%, between Rp. 1,000,001 - 3,000,000, according to 11%. Meanwhile, 17% receive voluntarily, 16% obtain below Rp 500,000, while 6% are given between Rp. 3,000,000 – 5,000,000. The number of benefits from funeral funds in residential areas was relatively the same as in villages. Subsequently, 56% of the respondents in residential areas obtained monetary benefits between Rp. 500,000 - Rp. 1,000,000, 20% got between Rp. 1,000,000 - Rp. 3,000,000, while 24% were paid voluntarily. Meanwhile, these amounts were smaller than the total compensation of IDR 1,500,000 - IDR 2,000,000, according to Jirhanuddin et al. (2016). It was also different from Prasojo et al. (2017), which found that participants received benefits through services, such as the process of bathing, dressing, and praying for the body. Meanwhile, Ismail et al. (2019) discovered that the benefits received by participants were similar to Prasojo et al. (2017) and also included transportation services to funeral sites and offerings of prayers. f. Recommendations The micro takaful concept is a mutual guarantee of individual contribution to an insurance fund managed optimally to increase the prevention of risks and strengthen the security of members. Subsequently, the informal funeral funding scheme (IFFS), as part of the micro takaful concept is performed by the homeowner association by collecting a few funds from the members. For a long time, this association has practiced IFFS as a means of helping members of the community that have suffered death. IFFS is a cooperative scheme that embodies the spirit of takaful. The muamalat teachings displayed by the contracts are based on partnerships, as stated by Jaenudin et al. (2018), and include Mudharabah, Wakalah, Waqf, Wakalah bil Ujrah, Musyarakah, and Mudharabah Musytarakah. For instance, during the use of mudharabah contracts in IFFS, participants' donations can be managed by the homeowner association. Figure 2 subsequently explains the underwriting process. Figure 2. IFFS Simple Contribution This program is assumed to provide compensations of Rp 5.000.000 per person for 68 International Journal of Islamic Business and Economics (IJIBEC), 5(1) June 2021, 59 - 70 their family welfare assistance and funeral costs, according to the stipulated provisions. Therefore, communities, especially low-income groups, will greatly feel the impact of micro takaful benefits and the ta'awun concept. The collection methods of database information from the target groups, called scheme participants include: a. Members of the homeowner association categorized as poor have a status that is determined from time to time. b. The recipients of this scheme's benefits are dependents on the death event of the head of their household. c. The following will be considered as recipients of the benefits and each family will be given an amount of Rp 3.500.000 or 5.000.000. This scheme still requires deep work to deepen the penetration into the community, and the public awareness needs to be part of the virtues of contributing to the benefits. Consequently, this will have a direct impact on raising the living environment by providing services and assistance to the community. Hence, the role of the local government to appeal to the public about the importance of being a participant in IFFS is required. Community leaders, ulama, chairmen of mosque committees, and homeowner associations are important parts of IFFS success. They are required to convince the community and entrusted to make IFFS well equipped as a new product for the transformation of micro cooperatives, and also by attending relevant courses and training. Therefore, this program requires stakeholders to follow procedures that correspond to the micro takaful-related regulations stipulated by the government. 4. Conclusion The funeral funds managed by homeowner associations were shown to not fulfill the takaful principle, as observed through the variables of calculation, collection method, and amount of contribution fund, alongside the calculation of and amount of benefits. Meanwhile, a unique finding was that the contribution payments were by giving rice, as well as cash, as observed in almost all research objects in the residential and village areas. Research findings of funeral fund management between Village and Residential areas as shown in Table 3. Table 3. Comparison between Residential and Village Areas Village Residential 1 Calculation of contribution Mutual agreement at a community meeting A mutual agreement at a community meeting 2 Method of collecting the funeral fund contribution The contribution is paid directly to the officers by the community members Contribution collection is performed by officers 3 Amount of contribution fund Between Rp. 3,001 and Rp. 5,000 More than Rp 10,000 4 Calculation of funeral fund benefits Deliberation with the RT / RW management Proposing at the RT and RW management meeting, then determination at a meeting of all residents International Journal of Islamic Business and Economics (IJIBEC), 5(1) June 2021, 59 - 70 69 5 Amount of funeral fund benefit Between Rp. 500,000 - Rp. 1,000,000. Between Rp. 500,000 - Rp. 1,000,000 This study suspects that the method of calculating takaful through money may not sufficiently or fully accommodate this form of compensation. 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