Commercial insurance of any kind, whether it is life insurance, health insurance, or property insurance, is haraam. However, in two situations, it is appropriate to deal with it:
1.When a person is compelled to do so, such as when someone is required to get vehicle insurance or when a firm requires its employees to purchase health insurance. In that situation, the one who forces individuals to do so is the one who is guilty of sin.
2.When a person is forced to purchase health insurance or is in desperate need of it because he cannot afford to pay for treatment out of pocket without it. According to a number of experts, there is a requirement that makes dealing with health insurance lawful, because the basis for the prohibition on this insurance is uncertainty and the element of gambling, not riba. When it’s like that, it’s acceptable in an emergency.
The uncertainty arises from the fact that the individual pays money but does not know if the amount he will receive in medical services will be equal to that amount or more or less.
Some types of insurance, such as life insurance, are based on both ambiguity and riba, with the individual paying instalments and not knowing how many there will be in exchange for a known sum of money that is more than he paid.
Dr. ‘Ali Muhiy al-Deen al-Qurrah Daaghi, Dr. ‘Abd al-Rahmaan ibn Saalih al-Atran, Dr. Yoosuf al-Shubayli, and Dr. Khaalid al-Du’ayji are among those who believe that health insurance is permitted in the event of need.
The comments of Shaykh al-Islam Ibn Taymiyah (may Allah have mercy on him) are among the statements of scholars that what is disallowed due of ambiguity is permissible in times of need:
The same is true of ambiguous transactions, which constitute a sort of gambling, albeit some varieties may be acceptable in the case of necessity and where a clear interest is served.
Ambiguous transactions are prohibited because they are a form of gambling that might lead to the illegal consumption of people’s money. However, if this is offset by a higher injury, it is reasonable to put up with the smaller of two evils in order to avoid the greater of two evils. And Allah is the most knowledgeable.
He also stated that because the harms produced by ambiguous transactions are fewer than those caused by riba, a concession is made when it is necessary, such as when the restriction on ambiguous transactions may cause more harm than the transaction itself. Sales of property, even if you don’t know what’s inside the walls or foundations, and sales of pregnant or suckling animals, even if you don’t know the size of the embryo or the amount of milk, are examples, despite the fact that most scholars believe it’s illegal to sell what’s in the uterus or the milk on its own (separate from the animal). Another example is selling crops once it is obvious that they would be good (though no absolute surety can be guaranteed), which is permitted by the Sunnah. The Prophet (peace and blessings of Allah be upon him) enabled the buyer of pollinated date palms to specify that they bear fruit, therefore he bought crops before there was any indication that they would be good, but only on the basis of buying the origin (i.e., the trees). As a result, it is evident that in circumstances of moderate ambiguity (where the uncertainty is about something unrelated to the original item), it is permissible to do things that are not permissible in other cases.
What appears to be the case is that working as a doctor in the hospital’s insurance department is permissible and is not regarded as assisting in something haraam, because among the patients are those who require insurance or are compelled to obtain it, or the company for which they work was forced to obtain insurance for them and their families. It is legal for consumers to take advantage of health insurance in these situations, as described above. There will always be those who do not require it, but it is impossible to distinguish between them, and we pray that Allah forgives them.
Is health insurance is haram in Islam?
DELHI, NEW DELHI: Key Islamic organizations have labeled health insurance policies “illegal” and warned Muslims to stay away from them, comparing the benefits to gambling. According to them, health insurance plans have turned a noble duty into a commercial activity, and hence are prohibited under Islam.
Is having life insurance haram?
In Islam, life insurance is compulsory. As previously stated, life insurance is deemed haram. Islamic law forbids or prohibits anything that is considered haram.
What kind of insurance is haram?
Takaful is a sort of Islamic insurance in which participants combine their funds to insure one another. Takaful-branded insurance is based on sharia, or Islamic religious law, and it covers health, life, and other types of insurance.
What is insurance in Islam?
Takaful insurance is distinguished from traditional insurance by the fact that premiums are treated as investments “contributions” to a mutual fund established with the goal of distributing the risk of an unfavorable event impacting a group member.
Takaful is derived from the Arabic word takaful “Kafalah” refers to a mutual help and solidarity agreement between members of a community in the event of a loss or damage to one of the members. Takaful is thus a form of mutual assurance.
- Materiality: any transaction must have a “material target” that is tied to the real economic transaction, either directly or indirectly.
- non-exploitation: any transaction must be oriented at a “material target” that is related to the real economic transaction, either directly or indirectly.
- the prohibition of any action aimed at financing “haram” or illegal acts involving alcoholic beverages, pork, pornography, or gambling.
Only ventures whose payment is based on fate sharing between investors and beneficiaries are permitted by religious law. These principles come from religious law’s condemnation of three practices:
- The Riba simply means “to add” or “to increase.” In reality, it refers to money borrowed or placed in a bank account at usurious interest rates.
Is life insurance halal Islam?
Takaful life insurance is totally halal, and it provides financial security as well as long-term savings. Life insurance is a valuable financial planning instrument that protects a deceased person’s family and children.
Is investing in insurance halal?
However, many Islamic scholars believe that insurance, particularly life insurance, is illegal because insurance companies may invest the money in shares of companies that deal in alcohol, gambling, or entertainment, which is prohibited by shariah or Islamic law. Furthermore, the insurance company may lend money and generate interest, which is prohibited by shariah, a legal framework founded on Muslim principles of jurisprudence that governs public and private elements of life. Shariah law covers a wide range of topics, including politics, economics, business, and social issues.
Is it haram to avoid tax?
The fact that tax evasion is forbidden could constitute it haram if a person is bound by the rules of the country in which he or she becomes a citizen. Muslims, on the other hand, may consider leaving the country or paying the tax regardless because they are still bound by a contract with which you have agreed.
Is insurance a gambling?
Gambling is described as betting money (or other valuables) on an event with an unknown outcome. The fundamental goal of gambling is to win more money than you put in. To make a gambling wager, you’ll need three things: thought, chance, and a prize. Casinos are the most well-known gambling venues, but they are not the only ones. There are online poker and sports betting sites, as well as Super Bowl office pools, Lotto, and a variety of other non-site specific wagering options.
Insurance is a specialized form of gaming. Yes, it is a method of safeguarding the insured party against financial loss. Yes, it’s a risk management tool for hedging against a speculative, uncertain loss. However, insurance is certainly a form of gambling. Two parties agree on the amount of the wager (by calling it a premium instead), the sort of chance (for example, using assumptions of when the insured will die), and the prize (by referring to the winnings as a death benefit). It’s a small consolation reward for the recipients, but it’s still a prize.