Question about Insuarance and other ways of investing money

[friend263]

Assalamualaikum Warehmatullahi wa barakatahu sisters and brothers i want help about taking insuarance and other ways of investing money for ourself or our child?? I mean what all things are halaal and other head to toe details of the same.......

 

[Ayyub]

Assalamualaikum Warehmatullahi wa barakatahu sisters and brothers i want help about taking insuarance and other ways of investing money for ourself or our child?? I mean what all things are halaal and other head to toe details of the same.......

Wa'alaikoum assalam wa rahamtullahi wa barakatuh.

For you question there are a lot of fatwas of our great scholars that I once read.

Shaykh Ibn 'Uthaymeen rahimahullah once answered the following:

Insurance Policies

Question: Is it permissible for Muslims who live as minority communities in non-Islaamic countries and who have no supporter or guardian other than Allaah, to take out insurance policies? The insurance company, through monthly payments, will take care of a person's children after his death?

Response: According to my knowledge, insurance policies are based on winning and losing. Every policy or contract that is based on this is in fact gambling, which Allaah has forbidden in His Book (Qur.aan) and has placed alongside wine and the worshipping of idols. He, the Almighty, says: {O you who believe! Alcoholic drink, gambling and divining with arrows are an abomination of Satan's doing. So avoid them in order that you may be successful}, [Soorah al-Maa.idah, Aayah 90].

Let me give you an example, You insure a car and pay one thousand dirhams every year in order that the insurance company guarantees to cover the cost of whatever might happen to the car, whether it is written-off or just damaged. If a year passes and the car has neither been written-off nor damaged, then the insurance company is the winner and the insurance policy holder is the loser. If, however, the car is written-off or badly damaged, the policy holder will get back more than he paid to the company. In this case, he is the winner and the insurance company is the loser. Every contract which is based on this is gambling and hence forbidden.

However, it has been mentioned to me that in some countries people are forced to take out insurance policies. So what can Muslims do if this is the situation? In my opinion, he should pay whatever money that he is forced to pay for insurance but he should not consider that it is a legal contract or agreement, but rather that it is money paid unjustly under pressure. If no loss occurs, this is by the Grace and Mercy of Allaah towards him and the money has been taken from him unjustly and he shall find it on the Day of Resurrection. In the event that he suffers some loss to his property and the insurance company intends to reimburse him, then, if the amount he is due back is equal to what he paid for his policy, he can justly take it. If, on the other hand, what he is due from the insurance company is more than he paid, he should not take more than the amount that he paid them. In this way, the process will, in my opinion, be in accordance with Islaamic law.

Shaykh Ibn 'Uthaymeen
al-Aqalliyaat al-Muslimah - Page 63, Fatwa No.3

Islaamic co-operative insurance companies

Question: In western societies the cost of medical treatment and hospital care is extremely high. This is also true for damages arising from car accidents or thefts from or fires to property and other possessions. Insurance policies can be taken out with companies that offer to pay a large proportion of any loss suffered due to sickness, accident or theft. What is the ruling concerning taking out insurance policies with these companies? Also, what is your opinion concerning transactions with Islaamic cooperative insurance companies, concerning which some committees have given rulings, both inside and outside Saudi Arabia?

Response: Concerning the first part of the question related to health insurance, home cover and so forth, the answer has been clarified previously.

The second part of the question relates to social cooperative insurance and rulings permitting this have been made, as the questioner rightly mentioned, by scholars both inside Saudi Arabia and abroad. In fact, there are benefits to be had from social insurance. However, despite these benefits there can also be drawbacks. The person who has a right to assistance from this insurance might become careless and irresponsible and not care about any accident that he might cause because he knows that he is covered by his insurance. He will not, therefore, have due consideration for others and for the law and, as a result, such a system could be detrimental. Because of this, I believe that such an insurance system should try to help those who are the victims of accidents and not those who cause them.

I mean, for example, that if someone has been the victim of an accident or an illness and as a result is injured or disabled then we must help him.

If, however, someone was the cause of an accident and has injured others or his negligence has led to him losing the use of some physical function, he is not helped automatically. Rather, his case is examined carefully and if he deserves help and support, then he is given it, otherwise he is not.

In other words, we can say that this cooperative fund should be used for those who are the victims of some kind of loss but if it is used for those who caused the loss, then it could be detrimental. However, we do not say that such a person should never be assisted but rather each individual case should be examined and studied separately and if the person deserves help, he should be given it.

My fear is that irresponsibility and carelessness might result from insurance, as does in fact happen. Some fools say, "I don't care if I go 150 kilometers per hour. If, as a result, I kill someone then his blood money is ready and waiting in the draw. It doesn't bother me." We seek Allaah's protection from having such an attitude!

Shaykh Ibn 'Uthaymeen
al-Aqalliyaat al-Muslimah - Page 79, Fatwa No.20

Fatwas of the Permanent Committee also said the same as Shaykh Ibn Utheymeen rahimahullah.

The second question of Fatwa no. 2233
Q 2: What is the ruling on insurance such as cars, goods, workers and factories? Sometimes the person applies for insurance willingly. Other times they are forced to have insurance. For example a car dealer may stipulate that the customers must insure the new cars they purchase by installments. The same applies when a person sends goods from another country.
(Part No. 15; Page No. 249)
We would like to know whether there are lawful and unlawful types of insurance. Is insurance considered a type of Riba (usury/interest)?
A: The type of insurance mentioned in the question, known as commercial insurance, is unlawful because it involves Gharar sale (fraudulent transaction where details about the sold item are unknown or uncertain) and Jahalah sale (sale with lack of knowledge) that cannot be overlooked. It also involves gambling, taking people’s money unjustly and Riba, which are all proved to be Haram (prohibited) transactions according to religious evidence. In fact, commercial insurance does not include forced kinds, as mentioned by the questioner, where the purchaser is forced to insure the goods they buy from the seller. Commercial insurance is willingly applied for and the purchaser can buy the car without insuring it or purchase imported goods whenever they arrive to the port of arrival. Such course of action is usually adopted by traders who seek to avoid unlawful transactions.May Allah grant us success! May peace and blessings be upon our Prophet Muhammad, his family, and Companions!

Permanent Committee for Scholarly Research and Ifta’

Member Deputy Chairman Chairman
`Abdullah ibn Qa`ud `Abdul-Razzaq `Afify `Abdul-`Aziz ibn `Abdullah ibn Baz

Fatwa no. 5918
Q: Modern insurance contracts imported from the West have become very widespread in our countries, so a good deal of Muslims subscribe to them. Many insurance companies and offices have also been founded. Furthermore, many Muslim merchants, factory owners and businessmen have subscribed in them as a guarantee for their imported goods and to redress any of their damaged or stolen goods or in case an accident occurs during construction operations, to factories or
(Part No. 15; Page No. 262)
to workers in terms of destruction, loss, murder or harm. Insurance may also compensate for the loss arising from accidents, robbery or damage that may happen to cars and may pay for the collapse of wells or mines and thus, the insurer escapes financial responsibility. Also, through life insurance the insurer's heirs will receive compensation in case of his death. In fact, there are many other fields of insurance which are classified, defined, specific conditions which are stipulated and for which annual installments are paid by the insurer to the company in defined amounts. Moreover, insurance companies organize insurance contracts pursuant to their own laws which are adopted and recognized by governments. We would like your answer to our question regarding the legality of insurance contracts in the light of Shari`ah (Islamic law) and to explain the ruling on working for such companies.
A: All types of insurance are Haram (prohibited), as they involve Jahalah (sale with lack of knowledge) and Gharar (fraudulent transaction where details about the sold item are unknown or uncertain) - which are unpardonable. They are also a form of gambling and taking people's money unjustly, and include Riba (usury/interest). There is a lot of evidence that all these transactions are forbidden. Allah (Exalted be He) says: And eat up not one another’s property unjustly (in any illegal way e.g. stealing, robbing, deceiving, etc.) He (Exalted be He) also says: Shaitân (Satan) wants only to excite enmity and hatred between you with intoxicants (alcoholic drinks) and gambling, and hinder you from the remembrance of Allâh and from As-Salât (the prayer). So, will you not then abstain?
(Part No. 15; Page No. 263)
Moreover, the Prophet (peace be upon him) forbade Gharar sale (fraudulent transaction where details about the sold item are unknown or uncertain). Likewise, it is impermissible to work for insurance companies as it involves helping them in sin. May Allah grant us success! May peace and blessings be upon our Prophet Muhammad, his family and Companions!

Permanent Committee for Scholarly Research and Ifta'

Member Member Deputy Chairman Chairman
`Abdullah ibn Qa`ud `Abdullah ibn Ghudayyan `Abdul-Razzaq `Afify `Abdul-`Aziz ibn `Abdullah ibn Baz

So insurances are haram according to the islamic Shari'a.

There was once a student of knowledge who asked Shaykh Al Fawzaan this:

Shaykh Saalih al-Fowzaan (may Allaah preserve him) was asked this morning, the 21st of Sha'baan, 1430, at King Su'ood Masjid in Jeddah about insurance that is required by law - Can a person receive benefits from it after being forced into it by law?

He said that when a person is forced by law to buy haraam commercial insurance, then he may not receive any benefits from it. He should pay from his pocket instead of using the insurance, even after he was forced into buying it.

All the Ulema share the same opinion on this topic.

And Allah knows best.

 

[friend263]

Wa'alaikoum assalam wa rahamtullahi wa barakatuh.

For you question there are a lot of fatwas of our great scholars that I once read.

Shaykh Ibn 'Uthaymeen rahimahullah once answered the following:





Fatwas of the Permanent Committee also said the same as Shaykh Ibn Utheymeen rahimahullah.




So insurances are haram according to the islamic Shari'a.

There was once a student of knowledge who asked Shaykh Al Fawzaan this:


All the Ulema share the same opinion on this topic.

And Allah knows best.

Jazakallahu kharen for the response and what about the investment schemes???

 

[Ayyub]

Wa iyyak sister.

Well insurances like banks deal with interest. So even if someone invest in them he is commiting a sin cause he also is then dealing with riba.

And Allah the most high said about Riba the following:

O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers.
And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged.
2:278-279.

A reason why the muslims are so weak and opressed is that they allowed that riba became apart of their lives.

 

[ahmed_indian]

Assalamualaikum Warehmatullahi wa barakatahu sisters and brothers i want help about taking insuarance and other ways of investing money for ourself or our child?? I mean what all things are halaal and other head to toe details of the same.......

,

sister, there are many other ways also to invest. like investing in real estate (eg. buying even a small piece of land in the outskirts of cities can get you 2-3 times more after few years in india), share market (Islamically allowed ones), investing companies (those who share their profit/loss with you.)

PS: but of course, there is a need to have good knowledge and trustworthy people who deal with.

 

[friend263]

,

sister, there are many other ways also to invest. like investing in real estate (eg. buying even a small piece of land in the outskirts of cities can get you 2-3 times more after few years in india), share market (Islamically allowed ones), investing companies (those who share their profit/loss with you.)

PS: but of course, there is a need to have good knowledge and trustworthy people who deal with.

very rightly said brother but i hope you are aware that purchasing a land is also not as easy as it seems and also to buy a land we have to be ready with atleast the downpayment which are very high nowa days See what i am talking about is for peaople like us who belongs to a middle class family and earn there livlyhood by doing loads of hard work daily sometimes what happens is we save some amount of money by Allahs grace but if we dont invest or do something about that money it is spend in some or the other way so hence i wanted to know from tti brothers and sisters if they are having any better option of investing that small amount of money hence need help and we dont live in a city where we have opportunities to invest in an islamic bank or something and as you are an indian you must be aware that in our country we muslims are divided like any thing so cant get the right way.............

 

[ahmed_indian]

very rightly said brother but i hope you are aware that purchasing a land is also not as easy as it seems and also to buy a land we have to be ready with atleast the downpayment which are very high nowa days See what i am talking about is for peaople like us who belongs to a middle class family and earn there livlyhood by doing loads of hard work daily sometimes what happens is we save some amount of money by Allahs grace but if we dont invest or do something about that money it is spend in some or the other way so hence i wanted to know from tti brothers and sisters if they are having any better option of investing that small amount of money hence need help and we dont live in a city where we have opportunities to invest in an islamic bank or something and as you are an indian you must be aware that in our country we muslims are divided like any thing so cant get the right way.............

:salam2:

i agree with what u said sister.

but regarding real estate, let me tell u one thing..as u said..its really very hard to buy lands in the cities. but you can try in the outskirts of the cities. eg. in the outskirts of lucknow, they are selling pieces of land of Rs 1 lakh to 1.5 lakhs. but after 2-3 years...their value increases nearly 3 times.

you can try if you can save some money and can get knowledgeable honest person to deal with inshallah. otherwise, in this field, its easy to find loads of cheaters.