i think we should know first the rulling of insurance.
Question:
What are the rulings on commercial insurance which is widespread nowadays?
Answer:
Praise be to Allaah.
1) All kinds of commercial insurance are clearly and undoubtedly ribaa (interest/usury). Insurance is the sale of money for money, of a greater or lesser amount, with a delay in one of the payments. It involves riba al-fadl (interest-based transaction) and riba al-nas’ (interest to be charged if payment is delayed beyond the due date), because the insurance companies take people’s money and promise to pay them more or less money when a specific accident against which insurance has been taken out happens. This is riba, and riba is forbidden in the Qur’aan, in many aayaat.
2) All kinds of commercial insurance are based on nothing but gambling which is haraam according to the Qur’aan:
“O you who believe! Intoxicants (all kinds of alcoholic drinks), and gambling, and Al-Ansaab (stone altars for sacrifice to idols etc.) and Al-Azlaam (arrows for seeking luck or decision) are an abomination of Shaytaan’s (Satan’s) handiwork. So avoid (strictly all) that (abomination) in order that you may be successful” (al-Maa’idah 5:90 – interpretation of the meaning).
All kinds of insurance are kinds of playing with chances. They tell you, Pay this much money, then if this happens to you we will give you this much. This is pure gambling. Insisting on differentiating between insurance and gambling is pure stubbornness that is unacceptable to any sound mind. The insurance companies themselves admit that insurance is gambling.
3) All kinds of insurance are forms of uncertainty, and transactions which involve uncertainty are forbidden according to many saheeh ahaadeeth, such as the hadeeth narrated by Abu Hurayrah (may Allaah be pleased with him):
“The Messenger of Allaah (peace and blessings of Allaah be upon him) forbade transactions determined by throwing a stone and transactions which involved some uncertainty.” (Narrated by Muslim).
[“Transactions determined by throwing a stone” – this was a type of transaction that was prevalent in the markets of pre-Islamic Arabia, whereby a stone was thrown by either the buyer or the seller, and whatever it touched, its transaction became binding. “Transactions which involved some uncertainty” – is a transaction in which there is no guarantee that the seller can deliver the goods for which he receives payment. Footnotes from the translation of Saheeh Muslim. (Translator)].
All forms of commercial insurance are based on uncertainty of the most extreme kind. Insurance companies and those who sell insurance refuse to insure cases except where there is clear uncertainty in whether or not the condition being insured against will happen or not. In other words, the condition being insured against must have a possibility of happening or not happening (as opposed to, for example, someone who has a pre-existing condition, such as a person who is on death row applying for life insurance--translator.) Moreover, this transaction involves something uncertain, which is when an accident will happen and the extent of the damage caused. Hence insurance combines three kinds of extreme uncertainty.
4) All kinds of commercial insurance consume people’s wealth unjustly, which is haraam according to the Qur’aan:
“O you who believe! Eat not up your property among yourselves unjustly” (al-Nisaa’ 4:29 – interpretation of the meaning).
All forms of commercial insurance are fraudulent transactions aimed at consuming people’s wealth unjustly. The precise statistics calculated by one of the German experts state that what people get back of what has been taken from them is no more than 2.9%.
Insurance is an immense loss for the nation, and there is no evidence or excuse to be found in the actions of the kuffaar who have lost the ties of kinship and friendship and are therefore forced to resort to insurance, which they hate as much as they hate death.
These are only some of the violations of sharee’ah which insurance is essentially based upon. There are numerous other violations which we do not have room to mention here, and there is no need to do so, because just one of the violations which we have mentioned above is sufficient to make insurance one of the things which is most prohibited in the sharee’ah of Allaah.
It is a shame that some people are deceived by the ways in which the insurance companies make insurance attractive and confuse them by calling it “co-operative” or “mutual support” or “Islamic”, or other names which do not change the unjust nature of insurance in the slightest.
The insurance companies’ claim that the ‘ulamaa’ have issued fatwaas stating that so-called “co-operative insurance” is halaal, is a lie. The reason for this confusion is that some insurance companies approached the ‘ulamaa’ with a deceitful set-up which has nothing to do with any kind of insurance, but they said that it was a kind of insurance which they called “co-operative insurance” (to make it sound attractive and to confuse the people). They said that it was purely in the nature of a donation, and that it was a kind of the co-operation enjoined by Allaah in the aayah (interpretation of the meaning): “Help you one another in Al-Birr and At-Taqwa (virtue, righteousness and piety)…” (al-Maa’idah 5:2), and that the aim was to co-operate in alleviating the overwhelming disasters that may befall people. But in fact what they called co-operative insurance was just like any other kind of insurance; the only difference was in the way in which it was set up, not in its essential nature. It was far from being any kind of simple donation or co-operation in righteousness and piety; in fact it is a kind of co-operation in sin and transgression. It was not aimed at helping to relieve the distress of calamities, but at depriving people of their wealth by unjust means, which is absolutely haraam, as are other kinds of insurance. Hence what they proposed to the ‘ulamaa’ is not even insurance at all.
With regard to the claim made by some, that part of the premium (money paid to the insurer) is returned, this does not change anything and does not free insurance from the taint of ribaa, gambling, transactions based on uncertainty, unjust consumption of people’s wealth and going against the principle of trusting in Allaah (tawakkul), and other kinds of haraam actions. Insurance is deceit and confusion. Anyone who wishes to learn more should refer to the essay al-Ta’meen wa Ahkaamuhu (Insurance and its rulings). I call on every Muslim who has pride in his religion and whose hopes are focused on Allaah and the Last Day to fear Allaah and to avoid all kinds of insurance, no matter how attractive their proponents make them, for they are undoubtedly forbidden. In this manner he will protect his religion and his wealth, and he will be blessed with security from the Owner of security, may He be exalted
and now to your question:
Question:
Salam Alicom, A friend of mine has gotten an offer from a life insurance company in USA. He is a student but he must work to support himself and his study. what makes the problem worse is that he must find a job by Sept 97 otherwise he will be illegal and will be kicked out of the country. So my questions are: (1) is working in life insurance companies Haram? (2) Are this circumstances for my friend considered a necessity and can he get this job until get a better one instead of loosing everything?
Answer:
Al-hamdu lillah (praise be to Allah). Life insurance is among the most severely prohibited types of insurance if not the single worst one. It is no doubt a type of gambling, and thus working in this field of employment is haram (prohibited), and it is forbidden to be a partner in helping people towards sin and enmity.
While taking into consideration the situation of this brother and the difficulty and distress that he has fallen into, I can but say: (translation of the meaning from surat al-Talaaq:2-3)
“And for those who fear Allah, He (ever) prepares for him a way out. And He provides for him from (sources) he could never expect” (65:2-3)
But from an another website:
Thanks for your question and we earnestly beseech Allah to guide us all to the way through which we can earn our living in a purely lawful way.
Working for commercial insurance companies is permissible, especially when one’s work is not involved in interest-based insurance policies.
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.
Accordingly, working in insurance companies is permissible, especially when one’s work is not involved in interest-based insurance polices. (Cars, hazards, maritime, and many kinds of life polices are not interest based.)
http://www.islamonline.net/servlet/...h-Ask_Scholar/FatwaE/FatwaE&cid=1119503548978
Dear brother in Islam, we would like to thank you for showing keenness on knowing the teachings of Islam, and we appreciate the great confidence you have in us. We hope our efforts meet your expectations.
Regarding your question, working as actuarial for insurance companies is permissible, and the income derived from this work is halal (lawful).
In response to your question, Dr. Monzer Kahf, a prominent Muslim economist and counselor, states:
“Insurance itself is not unanimously prohibited. Great `Ulama' (scholars) of the caliber of the late Sheikh Mustafa Az-Zarka (died 1999) believed it is permissible if there is no interest clause in the contract. Actuarial studies are useful for insurance and pensions and they are used all over the Muslim world. It is just happened that those contemporary `Ulama' who argued for its prohibition are not exposed to the needs of contemporary life, in industry, trade, transportation, urban living, health, and life insurance.
Anyway even those `Ulama', who believe that insurance offered by profit-making companies is in sharp contrast to the one offered by mutual or cooperative companies, do not consider working in such companies a prohibited action. Sheikh Muhammad As-Siddiq Ad-Darir of Sudan, a leading international Shari`ah scholar, who goes against commercial insurance and obviously against interest, argues that working for an interest-based bank is permitted as long as one avoids being a signatory of an interest-based contract, its writer or its signing witness. By analogy, the matter with insurance companies is the same, and it is permissible to work for an insurance company, as long as you are not the person who signs the contract on behalf of the company.
In brief, I happen to be an admirer of the opinion of Zarka. By the way, the late Mawdudi has similar opinion, and I believe that insurance is permissible as long as it is void of an interest clause. Working as actuarial for pension companies is permissible, so also is working as actuarial for insurance companies, and the income derived from them is halal (lawful), insha’Allah.”
http://www.islamonline.net/servlet/...nglish-Ask_Scholar/FatwaE/FatwaEAskTheScholar
