The document summarizes a study on applying ordinal logistic regression to analyze a proposed new integrated education plan takaful (Islamic insurance) product. The study used a questionnaire distributed to 410 respondents to collect data on demographics and preferences. Ordinal logistic regression and correlation analyses found high acceptance of the integrated plan among all income levels. The proposed plan combines multiple riders into one affordable plan.

1. Ordinal Logistic Regression
on New Integration Education Plan Takaful
Asaad, Al-Ahmadgaid B.
alstated@gmail.com
alstat.blogspot.com
MINDANAO STATE UNIVERSITY
ILIGAN INSTITUTE OF TECHNOLOGY

2. Introduction
Insurance is a form of risk management used to minimize loss or risk
against the risk of a contingent, uncertain loss (1). In Islam, there
is this called Takaful (Islamic Insurance). The central idea of Takaful
(Islamic insurance) contract is that it is a financial transaction of a
mutual co-operation between two parties to protect one of them from
unexpected future material risk.
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3. Introduction
There are many Family Takaful Companies in Malaysia such as Syarikat
Takaful Malaysia, Etiqa Takaful, Ikhlas and others. The businesses
in takaful used the takaful operator as the administrator of the fund
and manages the fund in trust on behalf of the participants, and the
contract between the participants and the operator is governed under
the contract of Mudharabah (profit-sharing) or Wakalah (agency).
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4. Definition of Terms
• Riders - A provision of an insurance policy that is purchased sepa-
rately from the basic policy and that provides additional benefits at
additional cost. Standard policies usually leave little room for modification or customization, beyond choosing deductibles and coverage
amounts. (4)
• Surrender Value - It is the amount the policyholder will get from
the life insurance company if he decides to exit the policy before
maturity. (5)
• Maturity Value - The amount to be paid to the holder of a financial
obligation at the obligation’s maturity. (6)
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5. Proposed Model
The proposed model of new product of education plan has to combine
all the riders in one plan and the name be changed to Economic Education Plan Takaful. The rider should include health, accident, hospital
costs, loss an effort to work, critical illnesses, education, death benefit,
death coverage and also pension. Life insurance or family takaful is
needed for everyone in the modern, so the product must affordable to
every category of income earners.
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6. Objectives of the Study
This paper exposes the study of Wan Muhamad Amir W. Ahmad et
al on the application of the Ordinary Logistic Regression Model for a
New Intergration Education Plan Takaful. This paper aims to:
• present the Ordinal Logistic Regression Analysis of the new propose
model;
• present the Correlation Analysis between items of the questionnaire
used in the study; and
• Investigate the association between the capabilities of buying takaful
insurance with other related predictors.
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7. Significance of the Study
This paper will be useful to statisticians and researchers as it addresses
issues such as the global concept and interpretation of ordinal logistic
regression model, which were applied on the New Intergration Education Plan Takaful.
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8. Scope and Limitation
This paper is an expository that focuses on the analysis of Ordinary
Logistic Regression Model applied in the New Integration Education
Plan Takaful on the article by Wan Muhamad Amir W. Ahmad et al.
There will be no programming or any statistical software to be used
in this paper. The author will only based on the results of the articles
published by Wan Muhamad Amir W. Ahmad et al.
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9. Methodology
The researcher used questionnaire, containing 10 questions which cover
the age, status, level of education, types of jobs, monthly salary, the
number of children in the household, the cost of the new product in
education plan takaful, and etc. The required sample size was 385, but
the researchers used 410 respondents. Reliability in the questionnaire
studies were also tested repeatedly. In addition, the researchers used
Ordinal Logistic Regression to investigate the association between the
capabilities of buying takaful insurance with other related predictors.
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10. Questionnaire
Questionnaire answered by 410 respondents.
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11. Results and Discussion
The data were considered to be ordinal since some of the predictors
are ordinal. Below is the Correlation Analysis between items of the
questionnaire used.
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12. Results and Discussion
Ordinal Logistic Regression Analysis
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13. Conclusion
After interviewing the 400 respondents using the questionnaire, almost
all the respondents agreed that the integration model of education plan
takaful could attract all categories of income earners into buying it. The
most attractive aspect about this model, the plan offers affordable price
for all categories of income earners and it also includes almost complete
riders. This research has proved that the new idea of integration model
in education plan takaful has been accepted by all categories of income
earners.
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14. Recommendations
This expository was only dependent on the results obtained by Wan
Muhamad Amir W. Ahmad et al. Due to that, we recommend using software for confirmation of the computations, and any possible
graphical illustration.
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15. References
• (1) Insurance. Wikipedia. Retrieved October 10, 2012, from:
http://en.wikipedia.org/wiki/Insurance
• (2) Ahmad , W.M.A. W. et al (2012). Ordinal Logistic Regression
Model for a New Intergration Education Plan Takaful . European
Journal of Scientific Research . Vol.71 No.1 (2012), pp. 109-116
• (3) Rider. The Free Dictionary. Retrieved October 10, 2012, from:
http://financial-dictionary.thefreedictionary.com/Rider
• (4) Rider. Investopedia. Retrieved October 10, 2012, from:
http://www.investopedia.com/terms/r/
rider.asp#axzz28tkck3kE
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16. References
• (5) ”What is Surrender Value?”. The Economic Times. Retrieved
October 10, 2012, from:
http://articles.economictimes.indiatimes.com/2009-12-09/
news/28435556_1_surrender-value-policy-premium
• (6) Maturity Value. The Free Dictionary. Retreived October 10,
2012, from:
http://financial-dictionary.thefreedictionary.com/
maturity+value
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