Monday 14 January 2013

ARE INSURANCE POLICIES PERMITTED IN ISLAM -

As-Salaam Alaikum Wa-Rahmatullahi Wa-Barakatuhu
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 ALLAH 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.

Abdullah b. Dinar narrated that he heard Ibn Umar (Allah be pleased with them) saying : A man mentioned to the Messenger of Allah (may peace be upon him) that he was deceived in a business transaction, whereupon Allah's Messenger (may peace be upon him) said : When you enter into a transaction, say : There should be no attempt to deceive.

Book 10, Number 3663: (Kitab-Al-Buyu- Book of Transactions)
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.
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.
From Fataawa �Ulama� al-Balad al-Haraam, p. 652, 653.
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.
JazakAllah Khair

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