Salam Brothers and Sisters

i don't know if this has been discussed or not but would love to know the Islamic ruling on Insurance Policy, is it okay for Muslim to partake in such.
There are several type of this policies ranging from Properties, Assets, Health, Life assurance, etc. These policies as we know are meant to secure us or our love ones in case of any eventualities.

There are also different packages run by these companies, for a example a life assurance policies where an individual do monthly contribution for a minimum period of five years (based on Nigeria govt.policy) and the cumulative amount is return to the individual after five years but in case of death, the next of kin is giving the expected cumulative amount in five years.

The most common one in Nigeria are the third party and the comprehensive insurance, the individual tend to loose some TOKEN amount within the insured period if nothing happen but if the unexpected happen, such investment could be a life saver.

There are also some policy package that will return some percentage of the money back to the individual if nothing happens within the insured period.

So what is the Islamic ruling on Insurance generally or are their selected packages that could be Islamical or Non-Islamical

following.

Any Opinion on this

I would also like to know about this.

Pls our most learned brothers in the house
Cc
Maclatunji
Tbaba1234
Wizeboy

Asalam Alaykum Waramotullahi Wabarakatuh

Commercial Insurance is strictly disallowed for Muslims.

Islam however been a complete religion and ways of life provide for all human needs. ISLAM has its kind of Insurance which is called "Takafu".

TAKAFU is defined as an Islamic insurance concept which is grounded in Islamic muamalat (Islamic banking), observing the rules and regulations of Islamic law. It is a co-operative system of reimbursement in case of loss, paid to people and companies concerned about hazards, compensated out of a fund to which they agree to donate small regular contributions managed on behalf by a Takaful Operator.

The principles of takaful are as follows:

a. Policyholders cooperate among themselves for their common good.
b. Policyholders contributions are considered as donations to the fund (pool)
c. Every policyholder pays his subscription to help those who need assistance.
d. Losses are divided and liabilities spread according to the community pooling system.
e. Uncertainty is eliminated concerning subscription and compensation.
f. It does not derive advantage at the cost of others.


Takaful is always in form of cooperative or mutual insurance, where members contribute a certain sum of money to a common pool. The purpose of this system is not profits, but to uphold the principle of "bear ye one another's burden". Commercial insurance is strictly disallowed for Muslims (as agreed upon by most contemporary scholars) because it contains the following elements:
1. Al-Gharar (uncertainty)
2. Al-Maisir (gambling)
3. Riba (usury)

TAKAFU Insurance policy are common in Asia and Muslim countries and are also common in South Africa but some Nigeria insurance company have started seeing a need to establish TAKAFU policy in Nigeria as well. The only Nigeria Insurance company, which I know that offer TAKAFU Policy in Nigeria right now is Cornerstone Insurance Plc.

But I know so many Insurance companies might want to start in the future with the guidelines of TAKAFU Insurance policy that the National Insurance Commission released recently for any interested insurance companies that want to partake in such policy. You can read about the guideline on: http://naicom.gov.ng/content?id=147

ALMIGHTY ALLAH KNOW BEST!!!


Maa Salam

domack99:
Salam Brothers and Sisters

i don't know if this has been discussed or not but would love to know the Islamic ruling on Insurance Policy, is it okay for Muslim to partake in such.
There are several type of this policies ranging from Properties, Assets, Health, Life assurance, etc. These policies as we know are meant to secure us or our love ones in case of any eventualities.

There are also different packages run by these companies, for a example a life assurance policies where an individual do monthly contribution for a minimum period of five years (based on Nigeria govt.policy) and the cumulative amount is return to the individual after five years but in case of death, the next of kin is giving the expected cumulative amount in five years.

The most common one in Nigeria are the third party and the comprehensive insurance, the individual tend to loose some TOKEN amount within the insured period if nothing happen but if the unexpected happen, such investment could be a life saver.

There are also some policy package that will return some percentage of the money back to the individual if nothing happens within the insured period.

So what is the Islamic ruling on Insurance generally or are their selected packages that could be Islamical or Non-Islamical

This is a fiqh (jurisprudence) issue. And as expected, there are different of opinions based on the understanding of each school (madhhab). Shi'i jurists:

Ayatullah Abu'l Qassim al-Khoei writes in "Taudhiul Mazail":

Insurance:
Insurance policy is an agreement between an insurance company and an individual whereby the insurer undertakes to compensate for loss or damage of the subject of insurance for a specified period, against payment of annual, halfyearly, quarterly or monthly premium by the insured.
25. Insurance may cover life, property, vehicles, aeroplane or ships, against partial or total loss
26. The insurance has to request the insurer for insurance cover, giving details of the subject to be insured and mode of payment of premium etc. The insurer then accepts the proposal.
27. The insurer then considers the insured’s request and accepts the risk. They specify the premium for the value of the risk covered and issues the insurance policy.
28. Insurance is allowed in all its forms. The insurer is taking the risk of compensating loss and the insured is paying for this.
29. If the insurance company fails to fulfill its obligation, the insured can cancel the policy and demand refund of premium.
30. If the insured fails to pay the Premium as agreed upon, the insurer is not liable to honour any claim or refund any premium paid by the insured.
31. Insurance cover is for a specified period as agreed by both parties.

Ayatullah al-Sistani:
Question: Is life insurance permissible?
Answer: It is permissible and there is no
objection in it.
www.sistani.org/english/qa/01221/

Ayatullah Nasser Makarim Shirazi :
Question 15: Do the Islamic laws prefer
general insurance over trade insurance? If a
Muslim can opt for trade insurance at a lower cost, what is his duty? Can an American Muslim purchase these insurance shares?

Answer: According to Islamic law trade
insurance (since it is an agreement and
general laws are applicable to it) is valid and legal and from this aspect there is no
difference between this insurance and general insurance. Therefore a Muslim can opt for trade insurance and also purchase the shares.
www.imamreza.net/eng/imamreza.php?id=9565

In sha Allah, I will try and update how these rulings were derived in line with the Sharia.

Salam alaykum

Rsponding to the question, the European Council for Fatwa and Research states the following:


The traditional insurance contracts (applied in the West) are prohibited in Shari`ah in principle because these contracts are based on mutual compensation as the company possesses the premiums for its own good and is committed to pay the compensation. This process involves risk because the occurrence of danger is not certain, and there is the possibility of paying compensation or not paying it, besides the possibility of the company's benefiting by the premiums or losing them along with other amounts.

The Shar`i or legal substitute for this is cooperative insurance that is based on an insurance portfolio for the good of the bearers of the insurance policies, so that they benefit from earnings and bear the losses. The role of the company is confined to administration for a wage, investing the insurance assets for a wage, or for a share on the basis of mudarabah. If there remains surplus from the premiums and their bonuses after paying compensation, it is a pure right for the bearers of the policies. The risk that is in the cooperative insurance is ignored as excusable, for the basis of this type of insurance is cooperation and regular donations, and risk is usually overlooked in donations.

Since cooperative insurance is still new and not widely practiced and cannot cope with big insurances, the Shar`i committees in the Islamic financial institutions have given the fatwa that it is permissible to resort to conventional insurance when there is crucial need to protect assets and insure activities, on the basis that risk is excusable because of need.

Therefore, it is permissible to enter into insurance contracts that are available in the West when cooperative insurance is nonexistent or unable to cover certain dangers.

From a discussion here http://www.islamicity.com/forum/printer_friendly_posts.asp?TID=16542

Dunno!

I have not always been a fan of insurance, since my dad insured his car with about 30% of the cost price of the car. Two months later, he got accident with the car. The useless insurance company where blaming him saying he didn't do this and that.... He should ask the poor taxi driver that hit him to repair the car. After serious argument and court cases, they agreed to repair the car. My dad waited for months and fixed the car himself.

To me insurance is just a waste of money.

But what happens in a situation where insurance cover on vehicle is mandatory like we have here in Nigeria, What do one do? Is Islam in support or against such insurance?

Maa Sha Allah, let me read peoples's comment and do some findings. I will add my own contributions later. Salaam.

jazakallah khairan

someone should tell us.
salam

Good question.

Wizeboy:
Asalam Alaykum Waramotullahi Wabarakatuh

Commercial Insurance will strictly disallowed for Muslims.

Islam however been a complete religion and ways of life provide for all human needs. ISLAM has its kind of Insurance which is called "Takafu".

TAKAFU is defined as an Islamic insurance concept which is grounded in Islamic muamalat (Islamic banking), observing the rules and regulations of Islamic law. It is a co-operative system of reimbursement in case of loss, paid to people and companies concerned about hazards, compensated out of a fund to which they agree to donate small regular contributions managed on behalf by a Takaful Operator.

The principles of takaful are as follows:

a. Policyholders cooperate among themselves for their common good.
b. Policyholders contributions are considered as donations to the fund (pool)
c. Every policyholder pays his subscription to help those who need assistance.
d. Losses are divided and liabilities spread according to the community pooling system.
e. Uncertainty is eliminated concerning subscription and compensation.
f. It does not derive advantage at the cost of others.


Takaful is always in form of cooperative or mutual insurance, where members contribute a certain sum of money to a common pool. The purpose of this system is not profits, but to uphold the principle of "bear ye one another's burden". Commercial insurance is strictly disallowed for Muslims (as agreed upon by most contemporary scholars) because it contains the following elements:
1. Al-Gharar (uncertainty)
2. Al-Maisir (gambling)
3. Riba (usury)

TAKAFU Insurance policy are common in Asia and Muslim countries and are also common in South Africa but some Nigeria insurance company have started seeing a need to establish TAKAFU policy in Nigeria as well. The only Nigeria Insurance company, which I know that offer TAKAFU Policy in Nigeria right now is Cornerstone Insurance Plc.

But I know so many Insurance companies might want to start in the future with the guidelines of TAKAFU Insurance policy that the National Insurance Commission released recently for any interested insurance companies that want to partake in such policy. You can read about the guideline on: http://naicom.gov.ng/content?id=147

ALMIGHTY ALLAH KNOW BEST!!!


Maa Salam

My mum happens to be the Head of Takaful Division
and Senior Manager at Cornerstone Insurance Plc.
Hajia Thaibat Adeniran.
She's the initiator of Takaful in Nigeria.

Praise be to Allaah.
1) All kinds of commercial insurance
are clearly and undoubtedly ribaa (interest/
usury). Insurance is the sale of money for
money, of a greater or lesser amount, with a
delay in one of the payments. It involves riba
al-fadl (interest-based transaction) and riba
al-nas’ (interest to be charged if payment is
delayed beyond the due date), because the
insurance companies take people’s money
and promise to pay them more or less money
when a specific accident against which
insurance has been taken out happens. This
is riba, and riba is forbidden in the Qur’aan, in
many aayaat.
2) All kinds of commercial insurance
are based on nothing but gambling which is
haraam according to the Qur’aan:
“O you who believe! Intoxicants (all kinds of
alcoholic drinks), and gambling, and Al-
Ansaab (stone altars for sacrifice to idols
etc.) and Al-Azlaam (arrows for seeking luck
or decision) are an abomination of Shaytaan’s
(Satan’s) handiwork. So avoid (strictly all)
that (abomination) in order that you may be
successful” (al-Maa’idah 5:90 –
interpretation of the meaning).
All kinds of insurance are kinds of playing with
chances. They tell you, Pay this much money,
then if this happens to you we will give you
this much. This is pure gambling. Insisting on
differentiating between insurance and
gambling is pure stubbornness that is
unacceptable to any sound mind. The
insurance companies themselves admit that
insurance is gambling.
3) All kinds of insurance are forms of
uncertainty, and transactions which involve
uncertainty are forbidden according to many
saheeh ahaadeeth, such as the hadeeth
narrated by Abu Hurayrah (may Allaah be
pleased with him):
“The Messenger of Allaah (peace and
blessings of Allaah be upon him) forbade
transactions determined by throwing a stone
and transactions which involved some
uncertainty.” (Narrated by Muslim).
[“Transactions determined by throwing a
stone” – this was a type of transaction that
was prevalent in the markets of pre-Islamic
Arabia, whereby a stone was thrown by either
the buyer or the seller, and whatever it
touched, its transaction became binding.
“Transactions which involved some
uncertainty” – is a transaction in which there
is no guarantee that the seller can deliver the
goods for which he receives payment.
Footnotes from the translation of Saheeh
Muslim . (Translator)].
All forms of commercial insurance are based
on uncertainty of the most extreme kind.
Insurance companies and those who sell
insurance refuse to insure cases except
where there is clear uncertainty in whether or
not the condition being insured against will
happen or not. In other words, the condition
being insured against must have a possibility
of happening or not happening (as opposed to,
for example, someone who has a pre-existing
condition, such as a person who is on death
row applying for life insurance--translator.)
Moreover, this transaction involves something
uncertain, which is when an accident will
happen and the extent of the damage caused.
Hence insurance combines three kinds of
extreme uncertainty.
4) All kinds of commercial insurance
consume people’s wealth unjustly, which is
haraam according to the Qur’aan:
“O you who believe! Eat not up your property
among yourselves unjustly” (al-Nisaa’ 4:29 –
interpretation of the meaning).
All forms of commercial insurance are
fraudulent transactions aimed at consuming
people’s wealth unjustly. The precise
statistics calculated by one of the German
experts state that what people get back of
what has been taken from them is no more
than 2.9%.
Insurance is an immense loss for the nation,
and there is no evidence or excuse to be
found in the actions of the kuffaar who have
lost the ties of kinship and friendship and are
therefore forced to resort to insurance, which
they hate as much as they hate death.
These are only some of the violations of
sharee’ah which insurance is essentially
based upon. There are numerous other
violations which we do not have room to
mention here, and there is no need to do so,
because just one of the violations which we
have mentioned above is sufficient to make
insurance one of the things which is most
prohibited in the sharee’ah of Allaah.
It is a shame that some people are deceived
by the ways in which the insurance
companies make insurance attractive and
confuse them by calling it “co-operative” or
“mutual support” or “Islamic”, or other
names which do not change the unjust nature
of insurance in the slightest.
The insurance companies’ claim that the
‘ulamaa’ have issued fatwaas stating that so-
called “co-operative insurance” is halaal, is a
lie. The reason for this confusion is that some
insurance companies approached the
‘ulamaa’ with a deceitful set-up which has
nothing to do with any kind of insurance, but
they said that it was a kind of insurance which
they called “co-operative insurance” (to
make it sound attractive and to confuse the
people). They said that it was purely in the
nature of a donation, and that it was a kind of
the co-operation enjoined by Allaah in the
aayah (interpretation of the meaning): “Help
you one another in Al-Birr and At-Taqwa
(virtue, righteousness and piety)…” (al-
Maa’idah 5:2), and that the aim was to co-
operate in alleviating the overwhelming
disasters that may befall people. But in fact
what they called co-operative insurance was
just like any other kind of insurance; the only
difference was in the way in which it was set
up, not in its essential nature. It was far from
being any kind of simple donation or co-
operation in righteousness and piety; in fact it
is a kind of co-operation in sin and
transgression. It was not aimed at helping to
relieve the distress of calamities, but at
depriving people of their wealth by unjust
means, which is absolutely haraam, as are
other kinds of insurance. Hence what they
proposed to the ‘ulamaa’ is not even
insurance at all.
With regard to the claim made by some, that
part of the premium (money paid to the
insurer) is returned, this does not change
anything and does not free insurance from the
taint of ribaa, gambling, transactions based on
uncertainty, unjust consumption of people’s
wealth and going against the principle of
trusting in Allaah ( tawakkul ), and other kinds
of haraam actions. Insurance is deceit and
confusion. Anyone who wishes to learn more
should refer to the essay al-Ta’meen wa
Ahkaamuhu (Insurance and its rulings). I call
on every Muslim who has pride in his religion
and whose hopes are focused on Allaah and
the Last Day to fear Allaah and to avoid all
kinds of insurance, no matter how attractive
their proponents make them, for they are
undoubtedly forbidden. In this manner he will
protect his religion and his wealth, and he will
be blessed with security from the Owner of
security, may He be exalted.
May Allaah help me and you to have insight
into matters of religion and to do that which is
pleasing to the Lord of the Worlds.


islamqa.info/en/8889

jazakallah khair ....Juma'ah Mubarak !!

Jazakallahu Khairan on the topic. At least gain knowledge. May Allah Guide us right. Amin. Jummat Kareem

Interesting...gain alot

Life insurance

Is it permissible to take out life insurance so as to ensure that my family are provided for after I die? Please supply the evidence (daleel) for your response.

Praise be to Allaah.

Shaykh Ibn Baaz (may Allaah have mercy on him) was asked about life insurance, and he said:

Insurance of one’s life or possessions is haraam and is not permitted, because it involves gharar (buying/selling something where it is not known whether what is being bought/sold will actually be achieved/delivered, or in what specific quantity, thus putting one’s money at undue risk to being lost) and riba (usury, interest). Allaah has forbidden all transactions that are based on riba, and all transactions which involve deceit, as a mercy to this ummah, and to protect them from that which may harm them. Allaah says (interpretation of the meaning):

“whereas Allaah has permitted trading and forbidden Ribaa”[al-Baqarah 2:275]

And it was narrated in a saheeh report that the Prophet (peace and blessings of Allaah be upon him) forbade deceit. And Allaah is the source of strength.

http://islamqa.info/en/10805

You can read more about the topic here: http://islamqa.info/en/search?key=Insurance+

ignis:
But what happens in a situation where insurance cover on vehicle is mandatory like we have here in Nigeria, What do one do? Is Islam in support or against such insurance?

Please answer this question ^^^

[quote author=Bash92 post=28215607] Please answer this question ^^^[/quote

We Muslims are being compelled and as a matter of fact, we have no option though it is still unislamic.

Wallahu alam.

This is an interesting thread for a good Muslim, allahu akbar!