Insurance??!!!

[el7ilwa]

What is the Islam opinion twards insured against accidents & medical expenses?? Is it (7aram) or acceptable in our religion??

[Arabian Princess]

I did an Islamic Economics course, and we discussed the issue of Insurance.

Well I cant go in details now coz I have to look for the papers. But the view I got from my lecturer was:
As long as the Insurance money is not used in a Riba/Usury dealings, and as long as it is not in a gambeling way (which was proved that its not) then it is Halal.

BUt, I read recently from Shiekh al Khalili that Life Insurace is Haram. I dont know on what basies he made that fatwa, I am basicly talking from business prespective maybe he is having another Islamic prespective.

I will look for the papers and bring the details to u inshallah.

[Equality]

Salami sis,

As Arabia Princess said, in the Islamic point of view, it is Haram besed on Shaikh Alkhalili, and most of the Ulamaa. this Fatwa might be helpfull for you:

Answers: insurance is absolutely illegal and illegitimate whether it is of life, house or vehicles because it is a mixture of gamble and interest (Ribah). First of all we give here these logical arguments seeking guidance from the Quran and Sunnah.

1 In its nature insurance is a compound of gamble and interest and these both are illegitimate (Haram) in Islam. If the insurance policy holder dies or the insured property is damaged before the insurance policy matures, it causes loss to the insurance company. And if the policy holder deposits all the installments of the premier, it benefits the company. And no-one knows that all installments of an insurance policy premier will be paid or not? Thus, a gamble. And if a policy holder pays full premier, he is repaid his amount along with interest on it. Hence, the element of interest.

2. Insurance abolishes the inheritance system of Islam because the insurance amount is paid to the person nominated by the policy holder in case of the policy holder's death. While every heir deserves to claim his share in the property left blind by a departed should. So, how can a thing be legitimized which disturbs a system given by the Quran and the Sunnah?

3. Belief in luck (Taqdeer) requires that after utilizing all legitimate means and courses, one should trust in Allaah ÓÈÍÇäå æÊÚÇáì about the future incidents. But insurance belies this belief for this is an illegal measure taken to safeguard one's future. The Messenger of Allaah ÓÈÍÇäå æÊÚÇáì T, his companions and other clergymen had lived in this world. They had also been blessed with children. They never arranged any such illegal precautions for their offspring, then why are we feeling the need for these measures?

However, some people refer to a Hadith quoted by Saad bin abi Waqas in Saheeheen which says: ''The Allaah ÓÈÍÇäå æÊÚÇáì 's Messenger said the person who dies leaving his heirs wealthy is better than the person who leaves his heirs as dependent and poor."

If we consider on this Hadith we find that this order of the prophet is not about taking precautionary measures for future. Rather it means that consuming all the riches gifted by Allaah ÓÈÍÇäå æÊÚÇáì like a spendthrift is not good. It should be saved for heirs.

Some people quote that insurance companies claim that their policy holders share their losses and profit. It is an open lie and a pretext to entice the ordinary people. For even if the insurance firm uses the premier so collected in some business, it deposits a pre-fixed amount of profit to the account of the policy holders which is obviously interest. Paying a specific, pre-fixed amount over and above the principal amount is called interest. Had it been a profit and loss sharing policy then the policy holder should not have been paid a fixed amount and instead the rate of return should fluctuate with ups and downs in the business. But this is not the case as insurance companies pay the money over and above the principal amount whose rate is pre-determined. Even if the companies pay to the policy holders on annual profit and losses basis the insurance business cannot be declared as legitimate because there is no chance of losses in this trade.

Moreover, it is also a fact that insurance companies loan out their capital on interest basis and in interest-based agreements no responsibility is accepted in case of any loss. While these companies also have some rules and regulations which make all this business and its structure illegitimate from Shariah point of view. Above all this system has been formulated by Jews whose Grudge against Islam is known to every one. They have launched this system to turn the people away from the commandments of Allaah ÓÈÍÇäå æÊÚÇáì with respect to savings, growth of riches, financial help for heirs in case of accidents.

Those educated so-called scholars who have opined in favour of insurance have actually been defeated by the Jews in the field of philosophy and ideology. Their role is condemnable. Some of them have gone to the extent that they say that no economic system can work without the element of interest. These scholars should ponder upon this verse before issuing such fatawa (verdicts).

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But say not - for any false thing that your tongues may put forth - "This is lawful, and this is forbidden," so as to ascribe false things to Allaah ÓÈÍÇäå æÊÚÇáì . For those who ascribe false things to Allaah ÓÈÍÇäå æÊÚÇáì , will never prosper. (An-Nahal 116)

[el7ilwa]

Sis A P thanx 4 trying 2 help me:color:

Bro samaki thanx so much 4 all these info I really need 2 learn alot from u bro:)
God bless u

[Arabian Princess]

Thanx Samaki for your answer. It is good to hear from both, the economic and religious point of view.

Well as I said earlier, I took a course in Islamic Economics. When the issue of insurence came, it discussed the same issue of it being a gamble. There were few points that proved that the nature of insurence itself is not a gamble.

I cant refute the words of scholars, but I beleive that people who are in the enviroment of economics would understand tha matter in another point of view.

Any way, I cant say my final word until I get hold of my notes. I would try to get them as soon as possible Inshallah.

[Arabian Princess]

Ok, I got in hold of my notes, but they are long so I will post little by little so you can grasp what am trying to say.

Why is Insurance not accepted in the Sharia Law (Islamic Jurspudience)?

Islamic Jurist came to a conclusion that Insurance is not accepted becaus of:

Gharar (Uncertinity)

In the insurance contract, the insures is not sure wether he will get the compensation he was promised, and how much he would get and when he is going to be paid.

Maisier (gambleing)
Similarties between gambeling and Insurance is:
a- the insured could receive a huge amount of money without simmiler input from his side

b- Most insured do not actually get anything out the preimums they pay (simmiler to gambeling)

c-same as the bookie, the insurer could lose alot if there is a large no. of claims. He could also gain alot of the no. of clamis is small.

Riba (usury/intrest]

a- Many insurance companies include usury, since they promise to pay more than what the preimum cost.

b- they actaully pay intrest on some of thier products.

c- they investment thier earnings in intrest based investments



Now, this what came from the Islamic Jurist. I will bring the insurance practionares point of view later.

[shamsery]

Let us define first what Insurance is ?

[Arabian Princess]

Definition of Insurance:
" a social device providing financial compensation for the effects of the misfourtoune, teh payments being mae from the accumulated contributions of all parties participating in the scheme " D.S.Hansei

" Modern Insurance is based on the idea that what is uncertain with respect to an indivual may cease to be uncertain with respect to a very large no. of simmiler indiviuals " M. NajatAllah Siddiqi


Before arguing on teh bases of the Halal and Haram on Isurance, I will bring some benefits the society gain from insurance:


Gurnteed payment for lossess

reduction of uncertainty (by paying the premium)

Effiecnt use of resources (since the capital gained from primume would be used, while if the money was saved for uncertainity it would be locked0

reduce dependency on welfare scheme (sometimes these schemes are not enough to cover finanical difficulties to diables and old aged)


More to come Inshallah

[Arabian Princess]

are you people still intrested?? or I was talking to my self :)

if you are still are .. I wuold continue :)

[Muscati]

Islamic is perfectly acceptable in Islam and there are many ways to run an insurance company without breaking Islamic laws.

[el7ilwa]

We still intrested dear Arabian, so continue;) , I would like to be convinced by some body's logic:wink: .

[Arabian Princess]

(ok I dont have the papers right not to explain in details .. however, I will try to summarise what I understand and at the same time try to search in the net)

ok regarding the three reasons that makes insurance haram I would like to explain them again:

1- a person who buys insurance is not intering an uncertainty business. He is simply protecting his self in a way. It is much simmiler like the pension scheme. Few scholars criticized the pension scheme!!

2- Riba, ok many insurance companies enter into business that engage in riba. But, if we took out this option and we assume that the company we are dealing with does not deal with riba, then this reason would fade away!
so simply, lets assume that we are dealing with an isamic company that does not deal with Intrest.

3- ok, insurance is no way close to gambling. a person who insures himself does not wish to gain the money! when he gains the money it means that something bad has happned to you!
to gain money out of gambling means you are lucky, when you get the money out of teh insurance policy it means you are unlucky!!

Well this is roughly what I remmber ... I need to refer to the papers for more details but personaly I beleive in an insurance company does not deal with Riba, then nothing wrong with it.
as mux said, there are ways that the insurance could be halal.

[Wanderer]

Do Muslim students drive in foreign countries where automobile insurance is required ?

If so, how without breaking the local laws ?

[Arabian Princess]

wanderer, for your information its a law also in Oman to insure your car.
we are not talking about practice .. we are talking about the rule itself.

[Wanderer]

Maybe you could clarify for me - is buying insurance for your auto halal or haram ?

[Arabian Princess]

its a law .. but some scholars consider it as Haram .. as you can see I explained the reasons above ..
however, there are conditions where it could be halal ..

its a contemprory issue, there isnt a stright cut rulling on it .. economists and religious people should come togther to clarify this issue.
I posted what I learnt in Islamic Economics Course I took. It sounds logical to me .. dunno what those who say its haram have to answer .. I am not a scholar after all.

[Wanderer]

So you are doing something that the Government requires, but that the Qu'ran forbids.

Bummer of a situation.

So one of the additional costs of automobile ownership, besides gas, oil, tires, general maintenance, etc., is also losing your soul to hell?

Hope you have a really nice European car to make it worthwhile.