abdes want examples from the Quran, well Quran does not forbid insurance it is the fanatic religious authority who have extrapolated 3 ayats and applied it to insurance
Insurance works on probability and likelihood like any risk, if that is haram so is wearing seat belts or driving safely, taking contraceptives, vaccination. so why don't bohras live completely carefree. even taking an umbrella incase it rains in the afternoon is chance. how stupid and primitive can you be
second how does it show lack of confidence in Allah, it is the fanatics within Sunni (not all so Anajmi don't jump) who believe everything 100% is with will of God. if he Allah willed good and evil why would he judge us for sins. So no Allah does not will everything he has given us intellect (some like abdes don't use it) to control our deeds and actions.
Off-course the kothar trolls will find fault in the below. But if this is not enough to convince liberal minded intellects nothing will.
We are lucky that Bohras are only 1 million who have no influence on premiums or world economy so whether they take insurance or not it is their personal choice. I think I rest my case.
Some people object that the death or accidents are from Allah and no one can supersede Allah’s will. Since the insurer guarantees against the death or accident, it is like going against Allah’s will. It is not true. No insurance in the world has ever claimed that it can save the insured from the death or the accident. The aim of every insurer, written very clearly in the agreement, is neither to guarantee nor determine the time and way of somebody’s life or death, nor does it intend to determine the future material luck of one’s dependents.
A life insurance policy also does not connote the idea that the participant is trying to protect his life from death against the will of Allah.
An insurance policy also does not mean that the insured person is determining his future’s financial capacity. In a policy, be it general or life, both the parties agree to work for a compensation or security against an unexpected tragedy. Such concept is, of course, in line with the Islamic principle whereby Islam encourages the people to strive hard in overcoming difficulties in their lives.
The Prophet Mohammad (ﷺ) says:
“Whosoever removes a worldly grief from a Momin, Allah will relieve him from one of the grieves in the hereafter. Whosoever alleviates a needy person, Allah will alleviate him in both the worlds and the hereafter.”
Some scholars doubt that the insurance is a kind of Gharar (uncertainty), a kind of betting in which the object or the subject matter of the transaction is not known. For example, usually at the ports, the containers, which are not claimed or seized by the custom authorities are auctioned out at the end of year. The buyers have to bid on the containers without knowing the type, quantity and the cost of the goods inside. Another example is the: Cows or buffaloes inside the water. The bidder bids without knowing the number, age or the health of the animal. This is called Gharar. The Shariah declares this void and sinful.
In answer to this objection, Dr. M. Najatullah Siddiqui says that:
The Shariah wants to make sure that any party who enters any dealing must acquire the full knowledge about the terms and conditions, profit and loss, rights and the duties of each party etc. Nothing should remain vague for any party which can become the root of anger, grief and dispute later on. If the knowledge about the quality and the quantity of the commodities under selling or buying, is lacking, it creates the clash of interest and, consequently, the conflicts.
The basis of the Gharar is the lack of knowledge and lack of certainty about the quality and the quantity. For example, the selling of a whole lot of fishes of the lake without knowing the quantity or quality, or the selling of the progeny of a pregnant camel before she gives birth.
In the other dealings like the services, the parties involved must know the terms, conditions, duties and rights of each other, otherwise the deal enters into the Gharar. Such a kind of Gharar can be avoided as this does not come under the necessity. As far as those Gharars are concerned which can not be avoided because they are essential to fulfill a necessity, are not prohibited in the Sunnah, as far as our knowledge is concerned. The Fiqh experts agree that for those needs of the society which are essential, the involvement of the Gharar is bearable to a little extent. If it exceeds, the dealing will be void. Obviously, there is a difference of opinion among the Fuqha in determining the little or big but most of the Fuqha consider that this kind of Gharar is negligible as abandoning such deal will be more harmful.
As far as the insurance is concerned, the company knows about the sum of money it will receive and pay. The knowledge about the money to be paid will be based upon the law of average. The possibility of mistake is less in this method. Even if the mistake occurs, it can be covered if the insurance system is mutual or under the governance of the state. Nevertheless, for an individual it is not possible to know in advance how much he will get and how much premium he will have to pay. The reason of this uncertainty is that the accident is unexpected. It can not be forecasted where and when the accident will take place. How much will be the loss. Whether the accident will really take place or not. This kind of uncertainty is unavoidable. This situation alone is the motivation of insurance. It is not fair to declare the insurance as illegitimate just because it carries a kind of Gharar on the part of an individual. Otherwise, the protection from the uncertainty will be impossible. Moreover, this is an extraordinary situation. It should not be prohibited on the whole just because of the Gharar involved on the part of the individual.
The transaction dealing of the insurance is modern. It is different from the traditional transactional dealings of give and take. The kind of uncertainty found in this is different from those dealings, which are mentioned in the Sunnah. This is a case of uncertainty on the part of an individual but certainty on collective level.
This kind of uncertainty does not become a point of conflict as the one who buys a policy has got prior knowledge of the uncertainty. He does not have any misunderstanding. He knows that he is going to buy a security against an unexpected accident. It is possible that he does not meet any accident. He does not resent the company if the accident does not take place. Neither has he got a feeling that he is cheated or the company took an undue advantage of the uncertainty.
As mentioned above, the premium is actually the ‘price of the security’ which a policy buyer is paying against any financial loss. This security is known and certain whether the financial loss occurs or not. Irrespective of the fact that who gets the compensation, who does not get anything at all as he does not meet any unexpected, and how much each person has to pay as premium, the Gharar on the in-dividual level too is absolved. The duties and the rights of each party are known to each other. Nevertheless, the financial consequences are dependant on those happenings, which are uncertain.
Some contemporary scholars like Mustafa Zarqa of Syria, Syed Mohammad Sadeq Al Hasni Al Rohani of Iran and Dr. Mohammad Al Bahi of Egypt have pointed out that the Sunnah prohibits some dealings which carry excessive Gharar. This applies on the Gharar of selling only. This does not apply to the individual Gharar in any part of the life. The Shariah approves those individual dealings in which there is an element of uncertainty like the marriage, ijara, selection of leader, selection of Hakam (judge) to resolve the conflicts.
Does the insurance contract involve the element of Gharar? Dr. Mohammad Masum Billah, PhD, USA refutes this as:
In an insurance policy generally, the subject matter is the life or the property on which the risk is presumed to be occurring in the future. The subject matter of the insurance contract is definite and certain. Similarly, the subject matter of a life insurance policy is the life of the assured who has been blessed by Allah with a life and who will also one day die by the will of Allah. Such occurrence of life and death is, of course, definite and certain as Allah says in the Quran:
كُلُّ نَفْسٍ ذَآئِقَةُ الْمَوْتِ
سوره آل عمران:3 , آيت:185 , جزء من الآية
…Everyone shall have a taste of death…
(3:185)
It is again a misconception about the insurance.
People say that the insurance company determines the value of one’s life.
It is not true.
The price of the life is invaluable and unimaginable. It is the insured person himself who determines the amount of money to be paid to his family as compensation to the financial losses in case of his death or accident. The insurance simply calculates the premium subject to the person’s capacity to pay over an agreed period.
Since the standard of living differs from person to person as well as the earning, one’s family may overcome the financial losses if it gets 5 lakh Rupees only but there is a possibility that another person needs 50 lakhs to re-settle his family if he dies.
In brief, the insurance claim money is not the price of one’s life but it is the help asked by the insured himself.
Some people insist to act upon only those divine orders, which are mentioned in clear specific words. Therefore, since the word ‘insurance’ is not mentioned anywhere, they do not hesitate to declare it out of Islam.
Not only insurance but there are many others acts not mentioned clearly in Quran but still they are proved from the acts of the Prophet Mohammad (ﷺ). For example:
• Not all the 5 time prayers except one or two are mentioned in the Quran. Neither their timings nor the method of offering. Still, all over the world, the prayers are performed simply because it is proved from the practice of the Prophet Mohammad (ﷺ).
• Third Khalifah Osman bin Affan (رضي الله عنه) started the first Azaan (Call for the prayers) for the Friday prayers. In the period of the Prophet it was not practiced.
• Second Khalifah Omer bin Khattab (رضي الله عنه) started the Taraweeh (Ramadan’s night prayers) with congregation while the Prophet Mohammad ﷺ did not do that. Neither the Taraweeh is mentioned anywhere in the Quran. Still the Taraweeh prayers are performed all over the world.
• Khalifah Omer bin Khattab (رضي الله عنه) ordered to reduce the amount of Mehr to the minimum. (although this order was challenged by an old lady and he had to take back his order)
• Khalifah Omer (رضي الله عنه) had terminated the punishment of cutting hands of the thief during the drought.
• The procedure to select the Khalifah was mentioned neither in the Quran nor in the Ahadith although it was an utmost important need for the existence of Islamic state. All the Khulfah Ar Rashideen had adopted their own ways to choose the Khalifah.
• The compilation of Quran and Ahadith was not done by the Prophet Mohammad(ﷺ). In fact, He was reluctant to allow the compilation of Ahadith. If the Khulfah Ar Rashideen and later Islamic scholars had not done that, the Ummah would have been in the dark age of Jahiliyya (ignorance).
• The beard which is one of the most sensitive issues is mentioned nowhere in the Quran. It is interpreted from some acts and sayings of the Prophet that the beard is obligatory.
Almost 90% of the Fiqh rules are not mentioned by name in the Quran or Hadith but are interpreted out of common sense and Ijtehad from Quran, Ahadith, Seerat and the life of the Companions (رضي الله عنهم) .
The above examples and many more such examples are refuted on the grounds that the above acts were done by the Companions (رضي الله عنهم) of the Prophet Mohammad (ﷺ) whose authority, due to their highest revered status, can not be questioned. It is partially true. The companions (رضي الله عنهم) had lived with the Prophet Mohammad (ﷺ) and observed him closely. Therefore, they were able to interpret the Quran and Ahadith in most appropriate manner. Not everyone can be given authority to do Ijtehad like them, it is an accepted fact. But the point to be noted is that the logic behind the Companions’ (رضي الله عنهم) acts were to comply with the demand of the changing time and its obligations. Their acts clearly show that their decisions were based on the principle of “common-sense should prevail”.
The apparent reason behind the first Azaan of Friday Prayer was that at the time of the Prophet Mohammad (ﷺ) the population of the Muslims had not increased so much as at the time of Khalifah Osman Bin Affaan. The locality was expanding, the people needed to come from far off areas so he introduced the second Azaan ( Allah knows better). Similarly, all the examples quoted above carry a logic of expanding the practicability of Shariah according to the changing times.
In the modern times, the technology like airplanes, cars, computers, etc. are used without any hesitation but the economics and scientific discoveries are not used under the same logic while the Prophet Mohammad (ﷺ) had never used any of the modern time’s inventions.
There are about five hundred verses in the holy Quran which deal with the legalities of Islamic life. There are indeed a number of divine injunctions in the Quran which justify the validity of an insurance contract. A contract of insurance contains the element of mutual cooperation. People should not forget that the Quran is the main guidance to provide an instrumental justification for the application of any subject like banking, insurance, engineering, medicine, high-tech, politics, economics, etc.
One can not find the engineering details in the Quran or Ahadith to construct a building, but an engineer can find guidelines that if he manipulates the proportion of cement and sand, what will be the consequence in the life here and in the life-after.
The Quran is the plain statement and guidance for mankind for their success as the Quran says about itself:
“It is a plain statement for mankind, a guidance and instruction to those who fear Allah.”
(Chapter 3, Verse 138)
There are several injunctions in the Quran and Ahadith regarding orphans, widows, poor, sick, etc. It is virtuous to help them with alms and charity but it is more virtuous not to let them beg and help them to stand on their feet. Insurance is the source of this bigger virtue.
The Prophet Mohammad (ﷺ) says:
“The one who looks after and works for a widow and for a poor person is like a warrior fighting for the cause of Allah or like a person who fasts during the day and prays over night.”
(Sahi Bukhari, narrated by Amar bin Saad Bin Abiwiqas)
Quran’s aim is to establish a society with proper distribution of wealth, less number of beggars and more number of donors. With a little common sense and intellect, one can easily interpret Quranic verses which are in support of insurance.
There is a story from the history.
A sage Hazrat Ghayasuddin living somewhere around Bukhara had many pupils. One of the pupils approached to him one day and asked for his permission to travel to another city. The reason was he wanted to earn by himself as he was not happy with the life on the mercy of the donors. Since that place was a small village with no chances of working and earning, he wanted to migrate to a bigger city and become earner. The sage gave him permission.
While travelling, he saw an injured bird falling to the ground. A thought came to his mind that as Allah has promised to feed every bird and animal, so he wanted to see how He will provide the food to this injured bird. Eagerly he sat under the shade of a tree and kept watching. After a little while, another bird descended who had some grains in its beak and started feeding the injured bird. It was a great moment of astonishment and thankfulness for the pupil. He returned back to his old place. When the sage saw him back, he asked the reason. The pupil told the whole story and concluded that it is Allah who provides the food from the sources unknown to human intellect, in the same way as he made a bird source for another injured bird. On hearing the story, the sage smiled and said: “So, you prefer to remain a needy of help from others rather than becoming provider of help to others”. (means, the bird who brings the grain for the injured is better than the injured bird who depends upon the other healthy bird). The pupil understood the message and left again.
The story carries the real message of Islam.
Islam wants to make the people stand on their own feet rather than becoming dependant on others’ alms, Zakat, infaq, charity, etc.
The insurance is based upon the doctrine of ‘Masaleh al Mursal (public interest)‘ for the purpose of eliminating hardship from one’s life.
Allah intends easy life for His creature; He does not want to put them to difficulties.
One must not forget that India is not a Muslim state. While, no Muslim state can claim to have established an absolute interest-free economic system, one can not expect interest-free dealings in India. The interest is not the prime objective in the insurance; it is secondary and acts as a functional part. Under the “necessity” rule, the prime objective is the financial security to an affected family. According to the law of priority, the secondary factors cannot supercede the prime objective if it meets the aim. The prime objective, in the eyes of the Shariah, is not only permissible but encouraged.
There are two main differences between Islamic based insurance “Takaful” and conventional Life Insurance of India and Pakistan.
1. According to Al-Mudureba concept of Islam, the insurance company works as an operator and the profits are distributed among the policy holders. The operator’s profit sharing margin is fixed while in the conventional life insurance the policy holders do get the profit in the form of bonus and added profit etc. The major profit holders are the investors. (In the case of life insurance, it is the Government who takes 51% of the profit being the main shareholder, and rest is distributed among the shareholders.
2. In the Islamic insurance the accumulated premium is invested in an interest-free contract. Also, it must be made sure that the investment is not engaged in any such business which is prohibited in Islam like wine, smuggling, usury, hoarding, money laundering, etc.
Both the differences will be discussed later in this chapter.
The contract of insurance is not the contract of interest. No clause of the contract mentions the guarantee or promise of interest. Neither any percentage of interest is fixed. The extra money paid to the insured on the maturity of the claim or on the happening of certain catastrophe, is called bonus, commission or the profit earned through the business investments made by the insurance company. One has to be careful here to check whether the insurance company is investing in any such operation, which Islam does not permit. The companies declare their statement of accounts and balance sheets at the end of the years. Their investment policies are transparent and can be seen on the internet too. No such investments were found which can be opposed by the Shariah.
If the element of interest, which is not the primary objective of the insurance, is a major concern which invalidates the whole insurance system and makes it illegitimate, then the infrastructure of the country like bridges, power plants, irrigation projects, railway and several other facilities too will be illegitimate to be used.
There are 12 companies in India who have been licensed to run the Life Insurance. They are spread all over India covering almost every remotest village. As an example, let us have a close look on the investment made by LIC and realise how the insurance benefits the humanity which would be never possible if it were only an interest trade or gambling. It deploys the funds to the best advantage of not only the policyholders but the country as a whole, true to the spirit of national integrity.
Investment in socially oriented projects:
Year 2004 :: Rs.256,105
Year 2005 :: Rs.312,524
Investment in community welfare projects:
Year 2005 :: Rs. 385,639
Investment in electrification projects:
Year 2004 :: Rs. 14,805
Year 2005 :: Rs. 25,727
Investment in housing to weaker sections:
Year 2004 :: Rs. 20,694
Year 2005 :: Rs. 21,346
Investment in water supply, sewerage:
Year 2004 :: Rs. 7,111
Year 2005 :: Rs. 10,346
Investment in road transportation sector:
Year 2004 :: Rs. 1,373
Year 2005 :: Rs. 1,387
Investment in airports, ports, railways, etc.:
Year 2004 :: Rs. 1,272
Year 2005 :: Rs. 2,463
(All the figures are in thousand crores.)
More to add are the projects of industrial growth, irrigation, power generation (private sector), municipalities, etc. The government engages the other companies’ investment too in telecommunication, agriculture, health, education, etc.
It is no less due to these investments that the country is the fastest developing country in education and technology. The Muslims too are being benefitted. It is not that only the insurance companies are playing the main role in the development, there are, of course, several other faculties taking part in the development, but our objective is to show to the critics that, unlike gambling, how the insurance is useful to not only the policyholders but also to every countryman irrespective of the caste, color or region. This is perfectly a picture that somewhat resembles with that of the divine instruction sent by Allah in the Holy Quran for mankind.
وَتَعَاوَنُواْ عَلَى الْبرِّ وَالتَّقْوَى وَلاَ تَعَاوَنُواْ عَلَى الإِثْمِ وَالْعُدْوَانِ
سوره المائدة:5 , آيت:2 , جزء من الآية
And help one another in righteousness and in piety; but help not one another in sin and transgression
Chapter 5: Al-Mai’dah, part of Verse 2.
If the infrastructure of the country had not been made is such a planned way, India would not have been different from Bangladesh or many other African and Asian poor countries. The reserve funds in thousands of crores accumulated due to the life insurance help the country to avoid the foreign loans. Otherwise, the country has to depend upon the superpowers and be dictated by them which we can see in case of Pakistan as well as several other Muslim countries.
One can raise the objection that all the investment as mentioned above is made on the basis of interest. It is true. The Government who uses these funds in the developments is not a business enterprise, neither the projects on which the government spends are profit generating, they are of public welfare only. Therefore, the government can compensate a loss in the profit which a depositor or the policyholder would have. If he invests or deposits he would get an increment, so why should he invest the money for the investment where the value of the money will come to half of it due to a higher inflation rate. So, it is the moral as well legal responsibility of the government not to deprive the policyholder from his right of the profit and pay him a substantial amount which he would get from other business or investment or the bank deposit.
