Wednesday, November 14, 2012

Insurance in the light of Islam An Intro-1

Assalam oalaikum,

“See, O Humans!!
The birds are flying high in the skies,
Just see what they do
Neither do they hoard their food
Nor do they starving die.
Has anyone ever seen
Birds dying of hunger?
It’s humans who hoard
And humans who die of hunger
(Sufi Saint Bulleh Shah)

The underlying idea of this verse is that birds do not hoard and neither do they plan ahead. They are carefree and they soar high in the blue sky. Their welfare lies in the hands of their Creator, Allah (swt) who takes care of their needs.

We know well Allah (swt) has honored us with the position of Ashraf-ul-Maqhluqat or the best amongst His Creations. Worshipping Allah (swt) and placing trust in Him is integral Imaan. Tawakkul is a cardinal tenet of Islam which has been defined in different ways:

Entrusting all the matter to the Master and relying on His Trusteeship
Severance by the servant of all hopes and expectations from the creatures (and attaching them to [Allah (swt)]

So tawakkul implies relying on Allah (swt) alone.

Allah (swt) has 99 beautiful names such as The Protector, The Sustainer, The Just, The Maintainer etc. So when Allah (swt) owns everything that is there on earth and in heaven and is All-Merciful, so the need does not arise for human beings to worry needlessly. (cont)

Keep Me In Your Prayers.
Amel Soname

Insurance in the light of Islam An Intro- 2

Assalam oalaikum,

Hazrat Umar (ra) said, ‘I heard Allah’s Apostle (saw) say that ‘if you were to rely on Allah as He is to be relied on, He would provide for you as He provides for the birds. They go out in the morning hungry and return in the evening full. (at-Tirmidhi)

We should realize that everything that happens in our life is not in our control. Tawakkul helps us to place all our matters in the Hands of Allah (swt) and accept His Decree.

The word insurance means a promise of compensation for certain potential losses in the future in lieu of periodic payments. Belief or trust in this kind of compensation is the outcome of a very narrow-minded, worldly and materialistic outlook. If we look at the larger picture it is Allah (swt) who is the best Compensator. So it is our duty to trust Him alone.

Allah (swt) says in the Holy Quran: “Whoever is stricken with poverty and turns to people for help, his needs will never be fulfilled, but whoever is stricken with poverty and turns to Allah (swt) for help, Allah (swt) will send him provisions sooner or later’. (Narrated by At-Tirmidhi-2326)

Keep Me In Your Prayers.
Amel Soname


Assalam oalaikum,

The schemes of insurance violate the Islamic Shari’ah in more than one way. So it would be a sin to get carried away by the alluring claims made by the insurance companies and to indulge in something which has been prohibited in the Quran and ahadith.

Let us first begin with the first point of contradiction, i.e. Riba. Islam strictly forbids all the transactions which are based on Riba.

Riba is an Arabic word that means addition or increment. Riba is a significant term in Islamic fiqh. It refers to an unjustified addition in borrowing or lending money and which is paid in cash or kind above the loan amount as a condition levied by the lender or voluntarily by the borrower. This kind of Riba is known as Riba-al-duyun or debt usury in Fiqh.

There exists an aspect of Riba in the insurance policies because the insured person is bound to receive much more money than what he /she had paid. Besides this, an element of Riba is found in the insurance funds which are invested in bonds, stocks etc.

There are numerous Quranic verses as well as ahadith which have forbidden Riba. Hence, it is the duty of each Muslim not to fall into a trap laid by the insurance companies which are merely business ventures with a profit motive.

Keep Me In Your Prayers.
Amel Soname


Assalam oalaikum,

In my earlier post I have discussed about the factor of Riba which makes the concept of insurance anti-Islamic. Here are some of the Quranic verses which strongly condemn Riba/ usury/interest:

O you who have believed! Fear Allah and give up what remains (due to you) of interest, if you should be of believers. And if you do not, then be informed of a war against you from Allah and His Messenger. And if you repent, you may have your principal. (Thus) you do no wrong, now are you wronged. (TMQ- 2:278 & 2:279)

O you who believe! Do not consume usury, doubled and multiplied, but fear Allah that you may be successful. (TMQ- 3:331)

Those who consume interest cannot stand (on the Day of Resurrection) except as one stands that who is being beaten by satan into insanity. That is because the say, ‘Trade is just like interest’. But Allah has allowed trade and forbidden interest. So whoever has received an admonition from Allah and desists may have what is past and his affairs may rest with Allah. But whoever returns to (dealing in interest or usury) those are the companions of the Fire. They will abide eternally therein. (TMQ- 2:275)

It is the duty of every Muslim to steer clear of Riba and all the activities, such as insurance, which are closely associated with Riba.
Though there are several sections within the Islamic community who approve of insurance but the point to remember here is that future lies in the hands of our Benefactor-Allah (swt) and not in the hands of some commercial, insurance company. Moreover, whatever the policy holders get above the amount (paid by him through Premiums), does not belong to him/her. So he or /she does not have any right over it.

Keep Me In Your Prayers.
Amel Soname


Assalam oalaikum,

In this post I shall mention some ahadith which also condemn Riba/usury. They are as follows:
Narrated Abu Huraira that Prophet Mohammad (saw) said, ‘Avoid the seven great destructive sins’. The people asked, ‘O Allah’s Apostle, what are they? Prophet Mohammad (saw) replied:
To join others in worship along with Allah,
To practice sorcery,
To kill the life which Allah has forbidden except for a just cause, (according to the Islamic law),
To eat up Riba/usury,
To eat up an orphan’s wealth,
To give back to the enemy and fleeing from the battle field at the time of war
Accusing chaste women
(Sahih Bukhari- vol: 4, book: 5124, hadith#28.)

Malik related to me that Zayd Ibn Asalm said, ‘Usury in the Jahilliya was that a man gave a loan to a man for a set term. When the term was due, he would ask, ‘Will you pay for me or increase it? If the man paid then he would take it. If the man did not pay then the money-lender would increase him in his debt and lengthen the term for him’.
(Malik’s Muwatta-Book # 31, number 31.38.84)

So the best future planning is to invest in our Aakhrah and abstain from getting enticed by the temporary, unjustified gains of this world.

Keep Me In Your Prayers.
Amel Soname


Assalam oalaikum,

Some people try to ignore the Riba factor associated with insurance. They believe that the existing insurance system, despite the Riba element, is justified on the grounds of Azzaroorat Taba’al Khatoorat (requirements at the time of calamity), Dafa al-Harj (wiping out the peril), Rafa zarar (combating the loss) and Tahaffuze-jaan-o Maal.  Besides these excuses they believe that insurance is legitimate in Islam because the lives and property of Muslims are constantly at risk in places where they are a minority community.

However, this is quite a narrow outlook of some people who do not hesitate to adopt anti-Islamic practices which are prevalent in the society. If Islam does not permit Riba at any cost it means that Riba is harmful for the society by and large. Islam does not propagate narrow and fragmented viewpoints. Instead Islam takes into consideration the welfare of the entire society and mankind. This is the reason why zakat/charity is one of the pillars of Islam. Zakat plays an important role in equitable distribution of wealth in the society and it ensures that the poor and needy are able to make two ends meet. Islam encourages virtues of universal brotherhood rather than filling one’s own coffers.
Riba on the other hand encourages selfishness and it degrades a person’s moral and spiritual nature. It hampers a person’s participation in the society. Riba also destroys the social solidarity and the desire to lend a helping hand to other fellow-beings.

Hence, instead of trying to control things which are in the Hands of Allah (swt), such as our future, we should have Tawakkul in Him and leave all our worries behind.

Keep Me In Your Prayers.
Amel Soname


Assalam oalaikum,

The second point of objection which makes insurance unfeasible for Muslims is uncertainty.
If we scrutinize the subject of insurance we find that there exist speculative uncertainties and pure uncertainties. The speculative uncertainties are those which have a possibility of a monetary profit or monetary loss. On the other hand pure uncertainties are those which entail loss only.
The Arabic term gharar can be described as hazard, risk or uncertainty. As a rule Islam prohibits transactions in which the conditions of sale are not known or are not certain. Only those transactions are permitted in Islam in which both the parties involved have surety and complete information about the terms of exchange. Islamic scholars have also described the term gharar as fraud. 
According to the Hanafi jurist Al-Sarakhsi gharar is a bargain in which the result is hidden.
The Holy Quran has strictly prohibited the transactions in which either of the parties may suffer a loss or injustice. The Islamic scholars have framed the basic principles regarding the rights and obligations of those who participate in financial markets after throughly analysing the related Quranic verses and ahadith. Besides, forbidding gharar and Al-Qimar (gambling) Islam has also prohibited Al-Maysir i.e. unearned income from games of chance. It would not be wrong to say that insurance is akin to gambling and the unearned income received by the policy holder’s family after his early death is akin to Al Qimar.    

Keep Me In Your Prayers.
Amel Soname