The present paper studies Islamic insurance (takaful) as opposed to conventional one. The first part of the paper covers, among other things, such issues as nature and historic roots of Islamic insurance, early forms of Islamic insurance and narrates the disputes among Muslim scholars concerning the compatibility of insurance with Islamic Shariah. The second part deals with history and emergence of Islamic insurance in the modern financial market, as well as the practice of Islamic insurance in different countries. The third part discusses the feasibility of Islamic insurance in Russia in the current legal framework. The paper contains comprehensive glossary of related terms.