Life insurance from an Islamic perspective III

Would it be permissible to work for a commercial insurance company that makes most of its income through car insurance? Responding to the question, Dr. Monzer Kahf, a prominent economist and counselor, states the following: Insurance is not unanimously prohibited. There are many scholars who believe that if insurance is not interest-based, it is permissible provided that the subject of insurance is also permissible (for example, it is prohibited to insure a shipment of liquor). I personally follow this latter opinion.

Why is conventional insurance not permissible in Islam?

Conventional insurance contains elements contradictory to Islamic Shari'ah.

Gharar "Uncertainty"

The insurance contract contains uncertainty due to: Uncertainty whether the payment will be accepted as promised The amount to be paid is not known The time it will occur is not known Any form of contract which is lopsided in favour of one party at the expense and unjust loss to the other is classified as Gharar. When a claim is not made the insurance company may acquire all the profits whilst the participant may not obtain any profit whatsoever.

The loss of premiums on cancellation of a life insurance policy by the policyholder, or the "double standard" condition of charging a customary short period in general insurance, whilst only a proportional refund is made if the insurance company terminates the cover is also considered as unjust.

Maisir Gambling

The participant contributes a small amount of premium in hope to gain a large sum.The participant loses the money paid for the premium when the insured event does not occur

The company will be in deficit if claims are higher than contributions

When a life insurance policyholder dies after only paying part of the premium his dependants receive a certain some of money which the policyholder has not been informed of and has no knowledge as to how and from where it has been derived.

Riba - Interests

An element of interest exists in conventional life insurance products - as the insured, on his death, is entitled to get much more than he has paid Insurance funds invested in financial instruments such as bonds and stocks contain and element of Riba

I feel obliged to say a few things aboutthe insurance because of the recent references to it. When the Muftis were asked for an opinion on any matter, they did not just tell the people that they should do this or that; or this is supposed to be this way or that way without explaining from the Quran the reasons for his answer. They would refer to the verses from the Quran. That was their source. They did not make up laws or come up with understandings out of nowhere.

We cannot loosely use what they had concluded and said during private conversations or even in Quranic studies without qualifying the time, place, context, reasons and references for such statements. We know that when they thought something was crucial for the community, they would give a Khutbah and have it recorded, or write articles in the newspapers or online newletters. Again, their opinion were based on the Quran. Some of the verses that they had based on their opinion about this subject are as follows :

[13:11] ... If GOD wills any hardship for any people, no force can stop it.... [39:38] ... If GOD willed any adversity for me, can they relieve such an adversity? And if He willed a blessing for me, can they prevent such a blessing?" Say, "GOD is sufficient for me." In Him the trusters shall trust. [6:80] ... Nothing can happen to me, unless my Lord wills it... [3:175] It is the devil's system to instill fear into his subjects. Do not fear them and fear Me instead, if you are believers.

There are also many other verses that give us the concept that only God can protect us; and if He wants to give us some trouble, no insurance can stop it. However, the messenger was also aware that no one submitter was the same. Trusting in God and coming to the conclusion that God controls everything and runs everything is a process and cannot be forced on people. It is a commandment that we shall trust in God. Yet how many of us truly live that statement every single moment of our lives. If we could, the test would be over or very easy.

That is why it is dangerous to make statements like "the messenger said this was Haram or prohibited" as a general statement. It does not serve any purpose. It makes the messenger seem as if he is making laws that were not in the Quran. Instead it would be better for us to quote the verses on which the messenger based his understanding or conclusion.

For those who want to go and listen to opinions from the Muslim organizations, or from religious scholars there is nothing wrong with doing so, as long as you study the information in the light of the Quran. If you are referring to those because you think the Quran lacks that information, you are doing it for the wrong reasons.

Plus you might be implying inadvertently the same thing that Mohammedans are implying that the Quran simply do not have all the information necessary for our salvation, and that we need additional sources besides the Quran.

We all know that they have always referred to the Quran for their views, based on the knowledge at their current stage of development. They have to correct some of the things they were advocating as they later gained a better understanding of the meaning of the verses in accordance with the will and mercy of God. If we can stick to what God left us with, the authorized translation of the Quran, and leave all the details to the growth of the individual submitters, we will avoid division and unnecessary arguments.

If you arrive at the same conclusion as the messenger in what you should do in matters that are outside the practices of religion, that is fine. But keep in mind that each of us come to Submission from different backgrounds. We all have different circumstances. We all learn at different paces and have different levels of understanding. Furthermore, none of us is perfect. In any case, do not force your opinion on others. Take the example from the messenger who gave us the freedom in such matters, as God instructs us in the Quran

In conclusion, be judges of yourselves, not others. Let the people practice the religion of submission in total freedom, without fearing reprisal from the fellow submitters. Enjoin others to do the right things using the Quran, but never force your opinion down their throats. If we cannot tolerate the freedom of expression or the right to question and answer amicably, we will never be part of the mission that God sent His messenger of the Covenant for: To purify and unite all the existing religions - Submission to God alone.