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    firmbeliever's Avatar
    firmbeliever Posts: 2,919, Reputation: 463
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    #1

    Dec 26, 2008, 11:31 AM
    Insurance in Islam ?
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    The true nature of insurance and the rulings concerning it
    What are the rulings on commercial insurance which is widespread nowadays?

    Praise be to Allah.

    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 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.
    Islam Question and Answer - The true nature of insurance and the rulings concerning it
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    firmbeliever's Avatar
    firmbeliever Posts: 2,919, Reputation: 463
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    #2

    Dec 26, 2008, 11:32 AM
    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.

    Fataawa Islamiyyah, 3/5
    Islam Question and Answer - Life insurance
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    firmbeliever's Avatar
    firmbeliever Posts: 2,919, Reputation: 463
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    #3

    Dec 26, 2008, 11:36 AM
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    Benefitting from insurance

    In 1996 I was in a car crash, and I was supposed to submit my papers to the insurance company, but I did not do so until I was in another accident in 2001, when I did not have any insurance. As a result of that accident I became paralyzed and needed treatment. I am very poor, praise be to Allaah. Because I tried all possible ways (with no success) can I submit my papers to the insurance company? Allaah knows the distress and hardship that I am facing.

    Praise be to Allaah.

    We ask Allaah to heal you and restore you to health, and to relieve your distress and hardship.

    If what is meant by submitting your papers to the insurance company is that you have health insurance, or intend to take out health insurance, you should note that this insurance is haraam, as is so-called life insurance, because the insurance policy in both cases involves ambiguity and a kind of gambling. This has been stated by the scholars in their fatwas.

    It says in Fataawa al-Lajnah al-Daa’imah (15/297):

    A – It is not permissible for the Muslim to insure himself against sickness, whether that is in a Muslim country or in a kaafir country, because that involves ambiguity and a kind of gambling.

    B – It is not permissible for a Muslim to insure his life or all or some of his physical faculties, or to insure his wealth, possessions, cars and the like, whether that is in a Muslim country or in a kaafir country, because these are kinds of commercial insurance, which is haraam because it involves ambiguity and a kind of gambling.

    End quote.

    Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) said: “Insurance means that a person pays a certain amount to the company each month or each year against an accident that may happen to the thing insured.

    It is known that the one who pays insurance is losing in all cases, and the insurance company may win or lose, because if the accident is very serious and costs more than the money paid by the customer, the company will lose, but if it is minor and costs less than the money paid by the customer, or if no accident happens at all, then the company will win and the customer will lose.

    This kind of contract – i.e. contracts in which a person may win or lose – is regarded as a kind of gambling which Allaah forbids in His Book and mentions alongside drinking alcohol and worshipping idols.

    Based on this, this kind of insurance is haraam. I do not know of any kind of insurance based on ambiguity that is permissible, rather all kinds are haraam, because of the hadeeth of Abu Hurayrah (may Allaah be pleased with him) who said that the Prophet (peace and blessings of Allaah be upon him) forbade transactions based on ambiguity.

    And Shaykh Ibn ‘Uthaymeen said:

    Life insurance is not permissible, because if the angel of death comes to the one whose life is insured, he cannot refer him to the insurance company. So this is a mistake and foolish misguidance, and it involves depending on this company instead of Allaah, because the person is depending on the company, if he dies, to take care of his heirs, which means depending on someone other than Allaah.

    This is akin to gambling, indeed it is gambling in a real sense, and in His Book Allaah mentions gambling alongside shirk, divination with arrows and alcohol.

    In the case of insurance, a man may pay money for years and years, and he may lose it, but if he dies soon the company may be the loser. All contracts in which there may be gains or losses are kinds of gambling.

    End quote. From Fataawa ‘Ulama’ al-Balad al-Haraam, p. 652, 653.

    Secondly:

    If you are forced to take out insurance and there is an accident, it is permissible for you to take from the insurance company the same amount as the payments you have made, but you should not take any more than that. If they force you to take it then you should donate it to charity.

    We advise you to fear Allaah and to turn to Him and make a lot of du’aa’, for anyone who turns to Him will never be disappointed. And we remind you of the words of the Prophet (peace and blessings of Allaah be upon him): “Whoever is stricken with poverty and turns to people for help, his needs will never be met, but whoever is stricken with poverty and turns to Allaah, Allaah will send him provision sooner or later.”

    Narrated by al-Tirmidhi, 2326; Abu Dawood, 1645. Classed as saheeh by al-Albaani in Saheeh al-Tirmidhi.

    And Allaah knows best.
    Islam Question and Answer - Benefitting from insurance
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