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)

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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)

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RIBA OR INTEREST-1

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.

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RIBA OR INTEREST-2

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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.

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RIBA OR INTEREST- 3

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.

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RIBA OR INTEREST- 4

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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.

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GHARAR OR UNCERTAINTY

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.    

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AL-QIMAR OR GAMBLING-1

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Besides Riba and Gharar there is another major argument against insurance, i.e. Al-Qimar or gambling.
Those who favor insurance will definitely go to any length to prove that there is no resemblance between insurance and gambling. This is because such people irrationally believe in the idea of insurance due to their own irrational fears which get the better of them.

However, Quran and ahadith have categorically forbidden all the economic transactions that entail Riba, Gharar and Al-Qimar (gambling) and Al-Maysir (unearned income), wagering, taking on responsibility that is not permitted by the Shariah, unknown quantity etc. Islam does not allow monetary transactions which are unproductive and which provide undue advantage to one party at the cost of another.

Living in non-Islamic countries is not an excuse to feel that one is driven by the need of accepting and seeking the concept of insurance. A Muslim has to follow the Shariah injunctions irrespective of the country where he resides.  (contd)

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AL-QIMAR OR GAMBLING-2

Assalam oalaikum,

If we carefully analyze the concept of insurance we find similarities between gambling and insurance, such as:

Life insurance seems to be like a slot machine in which the policy holder has to plug in money umpteen times but the machine pays back just one.
Insurance schemes like pure endowment and term insurance closely resemble gambling because the policy holder will gain profit only if some specific incident happens, such as his death in case of term insurance and his continuing to live in case of pure endowment.
In case of life insurance the insured person dishes out some money every month till he is alive. When the insured person dies his heirs will get a huge amount. The insurance company’s loss is the insured man’s gain and vice-versa. If the insured person lives for long he will end up paying more than he gets from the insurance company. Such an insurance game does not contribute anything to the society, as such. Money is just transferred between the company and the policy holders who enter this monetary transaction voluntarily knowing well in advance that one of them will win and the other will lose. So this makes the game of insurance no better than gambling at a casino.

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AL-QIMAR OR GAMBLING- 3

Assalam oalaikum,


We have so far discussed about the factor of gambling that is present in insurance, which makes it anti-Islamic. Here let us see what Allah (saw) has decreed in the Holy Quran:
‘They ask you about wine and gambling. Say, ‘in them is great sin and (yet some) benefit for the people. But their sin is greater than their benefit. And they ask you about what they should spend. Say, ‘The excess (beyond needs). Thus, Allah makes clear to you the verses (of revelation) that you may give thought.  (TMQ: 2-219)

In the above mentioned verse, Allah (swt) has instructed us to refrain from acquiring monetary gains effortlessly from (any type of) gambling. The disadvantages of gambling outweigh its advantages as it degrades the moral character of human beings.

After the revelation of the Quranic verse 2-219 some people readily gave up these vices whereas some continued to indulge in wine-drinking and gambling.
However, the verses 5:90-91 ultimately declared wine-drinking and gambling as illicit.

‘O you who believe! Intoxicants and gambling and stones and divine arrows are only an infamy of Satan’s handiwork. Leave them aside in order that you may succeed. (TMQ: 5-90)

With the revelation of the Quranic verse 5:90 gambling was outlawed along with wine-drinking as both these vices have many similar properties.
Since insurance also has some features similar to gambling therefore the followers of Islam should consider insurance to be forbidden as well.

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IS A CLEAR CUT RULING ON INSURANCE POSSIBLE- 1?

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Since insurance is a relatively modern concept we find that there is no direct mention about it in the Quran or the ahadtih. This fact has made it the subject of Ijtihaad or juristic reasoning. The Islamic scholars have established the basic principles about the norms of participation in the financial markets, after conducting painstaking and thorough inspection of the relevant verses from the Holy Quran and the ahadith. There are different opinions regarding this issue as everybody is entitled to form their own opinion. Different Islamic scholars have interpreted and judged the concept of insurance according to their own understanding of this issue. Naturally, difference of opinion is bound to rise. However, if there is lack of mutual consent over this issue this does not mean that the issue has reached a deadlock situation and that a clear cut ruling cannot be established on the matter (in the light of Quran and ahadith).
The main challenge before the Fiqhi (Islamic jurisdiction) scrutiny of insurance is to perceive and expose the actual nature of insurance and the insurance contracts and then present their findings before the Muslim masses so that the latter reject insurance.
(contd)

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IS A CLEAR CUT RULING ON INSURANCE POSSIBLE -2?

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The point which lacks clarity and which has hindered a clear ruling on the issue of insurance is the nature of insurance and insurance contract. If there was not a difference of opinion amongst the Islamic scholars regarding the nature of insurance contracts then a lot of confusion could have been avoided.
The rules and regulations of about 30 kinds of contracts such as rent, partnership, endowment, guarantee, loans etc are mentioned in the Book of Fiqh. These contracts can be further divided into many other types of contracts. The most significant contract is that of al-bai (sale). The rules of various other contracts are judged in the light of al-bai.
It is very important to identify the category under which the insurance contract comes because different types of contracts have different set of rulings for them in Islami fiqh.
Three different opinions may rise regarding this issue of insurance. The nature of insurance contract can be construed as the following:
A contract of charity
A modern transaction which is subject to its own set of rules and regulation.
A basic sale transaction wherein a commodity is exchanges for another.

In the following posts we shall analyze the nature of insurance contracts in detail.

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IS A CLEAR CUT RULING ON INSURANCE POSSIBLE -3?

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Here we shall discuss about the first point, i.e. insurance being similar to charity. Many Islamic scholars, who are in favor of insurance, claim that insurance is a blend of a charitable and a business type of contract. Some people are convinced with this description related to the nature of insurance but it should be realized that a contract does not become charitable simply because it may benefit both the parties. If this were the case then even the banks which offer interest would have been considered to be legitimate in Islam.
The insurance companies also do not involve any kind of support or assistance. The insurance companies never pay the insured person a single dollar without receiving payment (premiums) and a signed contract from them first. This is why the Board of Leading Scholars of Saudi Arabia has declared that ‘Insurance is a jointly onerous contract in which both the parties get something in return of what they have given. Thus, the characteristics of being a charitable contract are cancelled out in the insurance contract’. Blanchard has aptly remarked in his classic work on insurance that, ‘The insurer is not operating a charitable operation’.
Far from being charitable, the insurance companies are a part of
the commercial industry whose only aim is to earn profits. They try to exploit the weaknesses and insecurities of people, especially those who have a weak Imaan.

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IS A CLEAR CUT RULING ON INSURANCE POSSIBLE -4?

Assalam oalaikum,

I have discussed in my previous post that the viewpoint that insurance is akin some form of charity holds no weight. Those who hold his view are having illusions and they live in a fool’s paradise. The commercial insurance agencies use advertising as a tool to promote their agenda. They try to brainwash their target audience into believing that it is only through insurance that they can get peace of mind. Consequently, their gullible clients end up paying a much bigger amount through premiums than the expected amount of loss they may suffer to get peace of mind. On the other hand the so-called ‘charity-cum-insurance’ companies make huge profits by extracting enough money through premiums by which they can easily pay the expected claims on their company and also make profit. The tall claims made by some people that the insurance policies can make one’s future secure and reduce risks are nothing but hogwash because the insurance policies are risky themselves.
In his thesis on insurance Thunayaan had interviewed many Western authorities and he found that none of them agreed to the view that the concept of insurance has an element of charity to it.
According to Al-Dhareer, the people who deal with the insurance companies find that they are exploitive by nature and they operate with a profit-motive by taking advantage of the fears and insecurities of people.

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IS A CLEAR CUT RULING ON INSURANCE POSSIBLE -5?

Assalam oalaikum,

After a careful analysis of the subject of insurance, in the light of Shariah injunctions, it can be said that the insurance contract does not resemble any kind of Islamic contract besides the mutual onerous contracts and codes of sales. Therefore, the insurance contract has to meet the common criteria of these contracts in order to be considered as valid.
Some of the Islamic scholars state (regarding new, unprecedented contracts) that in the absence of any clear sign about such contracts being null and void, they should be considered permissible. There is a comprehensive discussion amongst Islamic scholars about which factors should be present in a legal Islamic contract and which factors should be absent.
There is consensus amongst the scholars regarding the four factors that should not be present in a contract to make it valid, i.e. Riba, gharar, qimar and jahaala. I have discussed these factors in detail in my previous posts. It is on the grounds of these factors that a majority of the Islamic scholars have aptly declared the commercial insurance as an anti-Shariah act.
The objective of Shariah regarding monetary transactions is quite clear cut. The important conditions which are required for a contract to be considered as valid include a balance between the two contracting parties and exclusion of uncertainties which can result in illicit profit made by any one party. These conditions laid down by the Shariah are meant to ensure that there is complete justice in the business dealings.
Since the insurance contracts tend to benefit only one party, they therefore, lack justice and have been excluded from Islam.

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AHADITH ABOUT RIBA

Assalam oalaikum,

We have already discussed about the Quranic verses which have forbidden Riba/usury. Here I have mentioned about the ahadith in which our Dear Prophet Mohammad (saw) has enlightened us about this matter.

Jabir sated, ‘Prophet Mohammad (saw) cursed the taker of interest, its giver, its recorder and its two witnesses. They are all alike’. (Muslim)

Through this hadith it becomes clear that all those who are involved in Riba are wrongdoers and the fact that Riba is a grave sin becomes evident by the fact that Prophet Mohammad (saw) has cursed those who are involved in it.

Ubaadah Ibn-al-Samit narrated that Prophet Mohammad (saw) said, ‘Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates and salt for salt (should be) the same amount for the same amount, equal for equal, hand for hand’.

This hadith states that monetary exchange should be done hand to hand. In case the money is of the same type than it should be in equal amounts. If these conditions are not met then it means that the traders have are involved in Riba. If we observe the insurance contract we will find that it involves two types of Riba, i.e. Riba-al-fadhl (interest through increased payment) as well as Riba-al-nasee’a (interest by means of a delay in payment which is needed to be hand-to-hand).
It is quite doubtful for the insured person to ever get the same amount from the insurance company, (directly or indirectly), as much he had paid to them through premiums. If the policy holder receives a larger amount from the insurance company than what he had paid through premiums then it will be tantamount to Riba-al- Fadhl. Since the amount can hardly be the same and the money is not exchanged hand-to-hand so both the parties commit the sin of Riba-al-Nasee’a.

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IS INSURANCE AKIN TO A CONTRACT OF GUARANTEE?

Assalam oalaikum,

 There are some Islamic scholars who are hell bent on trying to prove that insurance is not anti-Shariah by nature. In their bid to do so they have claimed that there is no speculation factor as far as the insurance companies are concerned because they rely on the law of large numbers. The scholars compare the insurance contract to al-dhamaan or al-kifaalah (contract of surety or guarantee).
The Islamic scholars who disapprove of insurance have found out that there is no point of comparison between insurance and a contract of guarantee. Al-Dhamaan or the contract of surety or guarantee has to be a philanthropic kind of contract. Otherwise one would be simply paying money for money which is akin to Riba.
In the insurance contract one pays for guarantee regarding something that may either occur or not. This involves gharar and jahaalah which is not permissible in Islam.

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HOW THE INSURANCE COMPANIES INVEST THEIR FUNDS

Assalam oalaikum,

There is another problem related to the commercial insurance companies of modern times that cannot be overlooked. When the data of the Life Insurance Facts Book (1999) was analyzed it was found that almost 74% of their funds were invested in government securities, corporate bonds, mortgage etc all of which involve Riba/interest. 21% of the funds were invested in stocks. Since the nature of stock is unknown so we cannot be sure whether the nature of the stock is within the purview of Islam or not.  A meager 5% of the funds were found to be invested in the real estate.

Where the property and casualty insurance companies are concerned a whopping 77% of their funds were found to be invested in forbidden ways such as bonds that involve Riba. 20% was found to be invested in stock the nature of which is again doubtful.

So is the duty of every Muslim to realize what is being done with the money that he hands over to the insurance companies. In a way, the policy holder pays money to a financial intermediary, i.e. the insurance company to be invested in un-Islamic ways and it will be through these un-Islamic means that the policy holder will be receiving his money back. So in other words, buying insurance policies is as much a sinful act as investing money in a haram way, directly. It is somewhat similar to a person who sells grapes to another person to earn profit, knowing fully well that the grapes will be used in manufacturing wine.

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IS INSURANCE INDISPENSABLE

Assalam oalikum,

Those who are in favor of insurance have come up with another argument. They opine that the overriding necessity of insurance contracts in the present day society make them indispensable and permissible. They try to justify their claim with the help of the fact that in the Hanafi school of thought most of the monetary contracts are based on necessity. They argue that the overriding necessity for insurance contract makes it acceptable and insurance contracts are much sought after these days because they fulfill the general requirements of the public and are a part of general welfare. So those who favor insurance claim that the insurance contracts are indispensable and without them the life of the Muslims will suffer.
However, we have to take clues from the Holy Quran and seek guidance from it instead of relying on our own intellect. The Quran says in chapter 2, verse 219 that the harm or sinfulness of gambling and wine drinking far outweighs their benefits. Similarly, though insurance may sound to be quite lucrative and tempting to some yet its harm outweigh its benefits. Hence it should be considered to be forbidden from the Islamic point of view.
Those who are in favor of the concept of commercial insurance usually use weak evidence to support their claims. This is not surprising because when the insurance contracts contains elements of Riba, Gharar, Al-Maisir, jahalah, Al-Qimar etc then it will definitely be quite a Herculean task to brainwash innocent Muslims into believing that there is nothing un-Islamic about insurance.
Just like the rich are getting richer day by day under the capitalistic system similarly insurance can also bring peace of mind, security etc only to the richer class. After all how can those people who are subject to poverty buy insurance policy and pay the premiums. So if insurance can help only those who can afford to pay the premiums, so what benefit is it providing to the society by and large?

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IS INSURANCE INDISPENSABLE -2?

Assalam oalikum,

In my earlier posts I have discussed how the defenders of insurance overlook the teachings of the Quran and ahadith and try to formulate their own opinion about this issue. Some of the weak arguments put forth by them include that insurance is a 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
Tahaffuz-e-jaan-o Maal (protection of life and property)
It is a contract of guarantee/surety
They invoke the Law of necessity to support their claim that insurance is not un-Islamic.

However, truth is like the Sun, the Moon and the stars which cannot be concealed for long. So any baseless argument in favor of insurance cannot validate it.
A bitter but true philosophy of life is that nobody is indispensable in this world. If anyone happened to be indispensable then this world would have ceased to exist a long time back. When a person departs from this world his loved ones may mourn for long periods of time because of their personal loss. However, what everybody has to realize is that live goes on ultimately. The responsibility of a child may shift from one person to another or the life of a happily married woman may turn upside down. However, life teaches one to move on, sooner or later. So when none of us is indispensable then how can an insurance policy be indispensable? As all of us know insurance is a relatively modern phenomenon. So how do we suppose that the people living during the ancient times survived without insurance? How did they manage to tide over any crisis or unforeseen disaster in their life without an insurance cover? Were all the civilizations wiped off from the surface of the earth just because they did not have any insurance policy to buy?
The answer is no. This is because this world can exist without insurance contracts also.

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IS INSURANCE INDISPENSABLE -3?

Assalam oalikum,

So we see that life does not come to a halt due to anybody’s death and Allah (saw) is the Sustainer of this entire world. The world exists since its creation and shall continue to exist till the day of Qayamah. If we look at the larger picture, we find that it is solely by Allah (swt)’s Mercy and Benevolence that the world moves on. Therefore and we are not at the mercy of some insurance company to pull us through hard times. Hardships and calamities are an azmaaish or test from Allah (swt). Having patience and trust in Allah (swt) is the sign of a true momin.
On the other hand, belief in insurance contracts for securing one’s future and reducing risks is a sign of weak Imaan.
We should seek inspiration from those who had tread on the path of Islam unconditionally instead of finding lame excuses for doing things which can affect our Aakhrah.
Hazrat Umar (RA) had said, ‘If Allah strikes me with a calamity I shall thank Him for 4 things:
That the test was not in my Deen
That the disaster could have been worse
It is an expiation for my sins and
 After the loss of Prophet Mohammad (saw) any other seems inconspicuous.

Therefore, in Islam a calamity is considered to be a test from Allah (swt). It is not considered as an undesirable event for which we should buy an insurance cover and start paying the premiums through our nose.

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IS INSURANCE INDISPENSABLE -4?

Assalam oalikum,

Allah (swt) says in Surah Al—Anaam, verse 151: ‘

‘Come, I shall recite to you what your Lord has forbidden for you. Do not ascribe partner to Him and be good to your parents and do not kill your children due to poverty. We shall provide sustenance for all..’

So hope in Allah (swt)’s mercy and steadfastness in times of trials are the signs of a true Imaan, which all of us should strive for. Panicking about the vagaries of life and then indulging in sins such as riba, gharar etc found in the insurance contracts is the sign of cowards and lack of tawakkul or faith in our Creator.
For a true Muslim worldly losses are a trial and Allah (swt) has promised in the Holy Quran, 2:155 that,

‘Be sure that we are going to test you with something of fear and hunger, some loss of goods or lives, but give glad tidings to those who are steadfast, who say when afflicted with calamity that: To Allah we belong and to Him shall we return. They are those on who (descend) blessings from Allah and mercy and they are the ones that receive guidance’.
So we find that in Islam human beings do not have the ownership of life and goods. Everything on earth belongs to Allah and shall return to Him. Human beings own nothing so there is no reason for us to consider ourselves as masters of our kith and kin and worry needlessly about who is going to take care of them after we depart.

Amel soname contact

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THE HARMFUL EFFECTS OF INSURANCE

Assalam oalikum,

We have discussed earlier that however lucrative an insurance policy may appear to some yet its harm definitely outweighs its benefits.
First and foremost, the concept of insurance leads to the concentration of wealth in the hands of the wealthy. This is against the principles of Islam. Charity, as we know, is one of the five pillars of Islam. The main motive of charity is to bring about social justice through equitable distribution of wealth- which prevents the concentration of wealth in a few hands. This is in total conformity with the Quranic injunctions.
Allah (swt) says in the Quran:
‘What Allah has bestowed on His Messenger as gains of war from the people of the township, belongs to Allah, to His Messenger and to kindred and to orphans and the destitute and wayfarer (those who lack means to sustain a trip) so that it does not become a fortune that circulates between you and the rich amongst you. (TMQ-59:7)
Islam is against stinginess, hoarding of wealth and self-indulgence. On the contrary, Islam encourages spiritual development, universal brotherhood and pooling together resources for the betterment of the society, as a whole. Sadly enough, insurance leads to an unequal distribution of wealth which goes against the Islamic principles in many ways, such as:
Since insurance is a flourishing business in the modern times, so the entrepreneurs who own the insurance companies gain huge profits.
Ironically, the rich who are not in a desperate need for an insurance cover can afford to get themselves insured against any hazard. On the other hand, the poor who are in a real need for financial security cannot afford the insurance policies.
Since the business of insurance has nothing to do with charity and it includes the elements of gambling and uncertainty/gharar so it creates an evil situation in which both the parties, i.e. the insurer as well as the policy holder indulge in deceit and fraud in greed of money.
I shall discuss about the dishonesty involved in insurance in my subsequent posts.

Amel soname contact

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CAN THE LAW OF NECESSITY BE INVOKED TO PERMIT INSURANCE?

Assalam oalikum,

Despite the fact that the arguments against insurance are supported with enough Quranic evidence and ahadith, yet the propagators of insurance try to come up with one excuse or the other for justifying insurance. Some of the scholars who favor insurance have tried to invoke the law of necessity in order to substantiate their claims. According to them insurance is an absolute necessity in cases where:
There is no safety of life and property of the Muslims, especially in places where communal riots are common.
Health care costs have sky-rocketed and it is difficult to bear the expenditure without a health insurance cover. So in such places the people are driven by necessity to opt for insurance.
Insurance is made compulsory by law.
Where there is no Islamic substitute to commercial insurance.

The Islamic laws are uniform and they do not change with every latitude and longitude. The 5 pillars of Islam are mandatory for each and every Muslim irrespective of the country where they live. So living in the West does not give a Muslim the freedom to follow Islam according to their convenience. What is forbidden for other Muslims is forbidden for them as well.
If the health care cost has risen in some countries then the health insurance costs have not fallen either. Moreover, if people can afford partying late night in discotheques and bars, they can afford their medical expenditure also.
Abdullah Al-Bassaam has rightly pointed out that embracing any practice simply because it is widespread in the society, is objectionable. If the Islamic scholars take this approach every now and then, Islam principles will be destroyed.

Amel soname contact

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Fraud practices in insurance-1

Assalam oalikum,


The modus operandi of the insurance companies is to invest the premiums collected from the customers and then they hope that the claims are less than the investment value. The clients who file for a claim with an insurance company have to face a tricky situation due to the following reasons:
The employees of the insurance company commit fraudulent practices to evade claims made by the clients. This includes deliberately corrupting the customer data. Errors are crept into the data processing system in order to corrupt the medical declarations. This makes it impossible for the clients to make a claim.
In many insurance companies the employees are given special instructions to evade each and every claim made by the clients on whatever grounds they deem best.
If the claims cannot be avoided in any way then the employees are supposed to increase paper work to such an extent that the policy holder gets frustrated and leaves.

This makes it amply clear that the insurance companies have a self interest of not paying claims. They receive a plethora of claims daily but they conveniently deny most of them by hook or by crook. People generally do not dispute their claims which give a huge profit to the insurance companies.
The insurance companies can act in bad faith in the following ways:
They are unable to swiftly and comprehensively investigate a claim.
They make unfair delays in the payments to the policy holder.
Ironically, the insurance companies are quite pleased with the dishonesty of their employees who are complicit with their fraudulent practices. Such employees are offered perks.
However, it would not be fair to blame only the insurance companies for defrauding the policy holders. The latter are also not free from guilt. I shall discuss about the fraud committed by the policy holders in my next post.

Amel soname contact

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Fraud practices in insurance-2

Assalam oalikum,

Apart from the insurance companies and their employees the people who buy insurance policies also indulge in fraudulent practices. The fraud that takes place in the insurance business on part of the policy holders involves the following:
Faking death to claim the insurance money. The swindlers may disappear for a few years and then reappear again and claim to have suffered from a memory loss.
Hiding their existing diseases before the insurance company
Fake age proofs are presented before the company to become eligible for the insurance policy.
Forging of the medical bills is a common fraud that takes place in the health insurance sector.
Traveling abroad for surgery, stealthily.
Having a damaged vehicle insured without informing the insurance companies
Not informing the insurance company about existing ailments.
Exaggerated or bogus claims

In some cases there is collusion between the insurance company employees and the policy holders to claim excessive insurance benefits. They resort to providing false documents and manipulating facts.
The statistics portray a gloomy picture about the insurance industry with thousands of fraud cases being reported every year by the insurance companies. This adds another feather in the cap of the insurance contracts. Besides the factors of Riba, gambling, gharar, jahaalah and some others which we have discussed earlier, another factor which make insurance un-Islamic and totally unreliable is the widespread fraud in this industry.

Amel soname contact

If you have any question contact me directly on my email. No other type of  help support or email support is valid to communicate with me. this is my email address

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amel soname 

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