Every day we are exposed to numerous stressful situations and although we are used to living with stress, sometimes it is too much, which often affects our health and disrupts our quality of life.
Just look at the statistic and you will see what we are talking bout, and what happens to us all does not have to do anything with our race, sex, and even social status or religion, in the majority of cases, we are struck by some issue or a problem, and we are wishing to find the best way to get out of it.
Life is often unpredictable, and this is so wonderful at the same time this is something that can make us so scared because we do not know what “bad” can happen tomorrow.
But this is life, and at times it is hard to think that just when we think we have arranged it the way we want, some unfortunate event can happen that turns our life upside down.
And if there is anything that may be comforting in those bad and sad days is our preparation for such events, if we can.
One of the preventatives is to go to the doctors for regular check-ups so that we do not be surprised when we are sick, and another is to pay life insurance when we are alive so that in case anything happens to us.
And it can happen to us a lot – stress at work and because of work, worrying about whether we will have enough money to make it through the month, whether we have provided the children with everything they need, and so on from day to day, and then an accident or an unforeseen situation happens unexpectedly and your life changes from the roots.
In case of death, serious illness, or accident, the circumstances in the family itself change significantly.
In addition to emotional problems, there are also financial problems that, without a life insurance policy, are often impossible to overcome.
For example, if you pay life insurance only covers the risk of the end of life, so that in the event of death, the insured sum is paid to the beneficiaries/heirs.
This insurance comes with a relatively low premium that ensures high coverage.
Now, we know that Islam looks in detail at every part of life, and it has got to say a lot on the topics of life and death, and the question is whether is allowed for Muslim believers to have life insurance.
Is it halal or haram?
Is Life Insurance Haram or Halal In Islam?
Did you know that in the past, among Arab tribes, it was common that when a murder happened, the killer’s family would compensate by paying money to the victim?
It is a format of mutual support in which the damage is not borne only by the one who caused it, but by a larger group of people.
Islam confirmed that principle and formulated it in its way.
Therefore, the basic idea of insurance is ensured by Islam, nevertheless, it stays to be seen how current kinds of insurance are following Islamic laws
First of all, we must say that the perspective of Islamic scholars regarding life insurance varies, and it is not unanimous.
A prevalence of them believes that life insurance is haram because in this type of contract, and when the contract is in question, we know that there are numerous hesitations and a kind of interest.
The problem here lies in the fact that the Islamic faith prohibits the closing of contracts where these elements are seen, and in the contract of life insurance this is the case.
So, according to this, we can see that life insurance is seen as haram.
Also, there is a certain number of occupations that should be an exception from this rule – and these are those who are performing some extremely risky occupations, such as deminers.
They are most certainly exempt from this rule, and the law obliges them to have life insurance.
Like insurance against accidents and natural disasters, the insured pays a special cash premium during the year.
If an accident of the type specified by the insurance policy does not occur within one year, that company keeps the cash premiums received and does not return any of it to the insured.
But, if an accident happens, the insured pays the already agreed amount. This type of transaction is very far from the nature of both trade and partnership.
As far as life insurance is concerned, the assumed person signs a contract that he will invest e.g. 10 thousand dollars, and died soon after paying the first premium.
In that case, its beneficiaries are permitted to the full amount of $10 thousand.
If this was a business partnership, then they will only be entitled to the amount of the premium that was paid, plus the profit on it.
And if the insured fails to pay his premiums after paying several of them, following the terms of the insurance contract, he will lose all or a large part of what he has already paid.
In the context of the Islamic legal system, this is an invalid condition.
Can Life Insurance be Halal?
Conventional or premium insurance is the most common type of insurance nowadays.
With this type of insurance, the insured is obliged to pay a certain premium to the insurance company, which will recompense the insured in the event of damage defined by the contract.
The primary goal of an insurance company is profit.
But, most certainly there is an alternative.
Some Islamic scholars suggest joint insurance, which, unfortunately, is not present in all countries, but in some (even Muslim communities) it is known, and it is the only one that is permitted without a question.
Having in mind that a small number of scholars consider life insurance permissible, then this may be the way how it can be allowed for people of the Muslim faith.
So the majority thinks that is haram to have life insurance, but if a person still wants to do it, then it is seen as a format of long-term savings, and a certain percentage should be set aside annually in the name of progress and growth and should not have any interest.
That growth implies division into charity after it is collected from the insurance company.
But, it is said that modern formats of insurance corporations are in polarity with Islamic law.
This is most likely the case when it comes to life insurance – insureds do not deliver premiums as a contribution that would later be spread to the helpless as is said in the Quran.
Also, insurance organizations finance some other businesses, which includes interests, and this is also not allowed in Islamic laws.
There is a major contradiction here – between life insurance and Islam, as
insurance is disobedient to the entire concept of justice between individuals.
So, as we have said, there is something that is called joint insurance, and this is the one that is completed by the Islamic laws; but as we have said it does not exist in all countries.
This type of insurance, allowed and seen as halal in the Islamic faith is joint or reciprocal insurance, which is founded on the organization of persons uncovered to equal risks, and all of them are paying the same amount for the same reason.
And the money does not go to some unknown source, but it goes to all communities, and it must be given for the growth of the community and given to those who are underprivileged.
More about Life Insurance
Insurance is a contract that transfers the risk from the insured to the insurance company, with the payment of an insurance premium.
Insurance, in this sense, materialized for the first time in the 14th century in Italy, when particular retailers developed marine insurance companies, which protected damage caused to ships and their cargoes against a certain amount.
After that, insurance branched out, expanded, and developed, to take on many forms and shapes in modern times.
Numerous insurance companies offer different kinds of insurance, and the thing that is common for the majority of them is that the insurance premium relies on personal needs and choice of insurance, the health condition of the person who is taking that insurance, and their material status.
In some cases, the property of one person can determine the type of insurance that person will take.
This is all the necessary information for the insurance company.
It is also necessary to know that each insurance company has established conditions under which it does not insure clients due to illness or old age.
Also, in some insurance companies, the longest insurance period is 40 years, that is, until the age of the insured is 65 or 75; this is understandable, as people who aer very old or very sick are very likely that they will obtain the money from insurance, and there is no “gain” or a profit for the company.,
Some policies contain a savings component and are equally intended for the younger and older population.
At the end of the insurance, the insured amount is paid, while in the event of death, in the version in which the return of the premium in the event of death is agreed upon, the money paid up to that time is paid.
The premium can be paid annually, semi-annually, quarterly, monthly, or once, depending on the insurance company and the type of insurance you are paying.
Different types of insurance are indispensable in many spheres of our lives, and nowadays it is such a common aspect of our lives, and maybe some of us bever think it through, as we are used to paying health insurance or car insurance.
Maybe for life insurance, we are not so sure, as some of us do not want to think in that way of life, but may we should.
So, for example, owning a car requires an auto insurance policy, medical services require health insurance, and an uncertain future requires financial protection through social and pension insurance.
What should we know about life insurance based on Islamic legislation – well, most commonly it is said that commercial insurance is seen as haram.
If the state imposes on people some kind of insurance (such as car insurance), then the person is not guilty of using insurance, because that person is forced by the state (on its laws) to do the same.
While any other commercial insurance that is not imposed on the person is seen as haram, and here life insurance, property insurance, pet insurance, and accident insurance are also included.
We must add that the Islamic faith prohibits insurance for various reasons, and one of them would be enough to ban commercial insurance.
It is associated with uncertainty, and also gambling, and interest in making a profit from it, so it is seen as a great sin.
However, the truth that current types of insurance are not obeying Islamic instructions does not mean that Islam is against the very concept of insurance.
Islam simply opposes ways of manipulating and using the difficulty of others, as is seen in insurance; and based as some Islamic scholars say that the entire issue is seen in the fact that we have no choice and that thanks to the lack of an Islamic sort of insurance, people have to take the one that it is presented to them, that is available to them.
In this way, people, even those of the Muslim religion have to have car
insurance, or to pay health and social insurance.
There is no choice for them – and it is forgiven if they make sin in doing so.
The one insurance that is permitted in the Islamic faith is joint or reciprocal insurance, which is founded on the organization of persons uncovered to equal risks, and all of them are paying the same amount for the same reason.
If the weight of the accumulated contributions is more significant than the payment accepted by the business and the administration fees, the participants are in title to obtain the remaining donation or shift it for the next period.
If, on the other hand, the weight of the accumulated donations is minor, an extra fee is needed from the members to cover what lacks.
No one is allowed here to make a profit but to prevent some losses or damages as the entire society.
This is insurance on the Islamic laws.
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