Is Insurance is Halal? - An Explanation of the Arguments For Insurance
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- čas přidán 28. 04. 2020
- In this video we explain the 3 key arguments for why we humbly consider insurance to be permissible. This is a minority view, but one shared by a number of heavy-weight and well-respected scholars. This is also not a fatwa, just our considered and researched view.
For fatawa see our Fatwa forum - forum.islamicfinanceguru.com/ - please note that this is not the view of the muftis on this forum. They're with the majority on this.
Please also note that we are very supportive of the takaful insurance industry. Our argument in the video is a technical one - not a moral one. Morally takaful insurance is far better than conventional insurance as it invests in halal assets, and holds itself up to a higher moral standard. It is a separate question whether any takaful operator today has fully realised the promise of this vision, but nevertheless, we as Muslims should prefer takaful insurance over conventional when the opportunity presents itself.
We would love to hear your thoughts, question, advices and comments too!
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TIMESTAMPS
The issues in a nutshell
00:53 - What is agreed and what is disputed in this debate
02:05 - Arguments against conventional insurance
02:50 - Why takaful or cooperative insurance is seen as halal
Argument 1: The gharar Islam forbids is not the gharar of insurance
03:33 - What gharar does Islam forbid and why do people think it applies to insurance
05:50 - The issue with this kind of analysis & benefits of big data
07:20 - The consumer is also not being exploited - price comparison
07:55 - Security Guard analogy to insurance
Argument 2: The Prophet allowed some degree of gharar in some circumstances
09:25 - Insurance allows certainty in people's lives - vastly beneficial
09:55 - Prophet allowed a transaction that was beneficial for community
10:46 - two situation in which Prophet accepted unequal exchanges
13:09 - How insurance is helpful to people in society?
Argument 3: The Takaful argument
14:51 - Takaful is like conventional insurance - so both should be allowed
16:33 - Takaful companies have had to compromise to modernity and are profit-focused - and that's good
18:06 - Final thoughts - life insurance, compulsory insurance, and takaful insurance
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#insurance #halalorharam #islamicfinance #ifg #fatwa #lifeinsurance #halalinsurance
Brother, you bring tears to my eyes with such honest and comprehensive analysis. I am an insurance professional. I was thinking of leaving insurance because I wanted to be on the right side of our religion. But you inspired me today to keep fighting and to work towards having a position in the company wherein I can influence shaping insurance to follow as much rules of our religion as possible. The change has to start somewhere. May Allah reward you.
the problem is most likely your company sell life insurance. And everybody agree that life insurance is haram
why is your name god guitarist....
Brother, at least find an Islamic insurance company. Remember who ever leaves something for the sake of Allah, Allah will give you something better
Asalam, Bro find another job and leave haram insurance job. You can't bet your arguments based on an individual's point of view and negating the Quran's stance on interest (RIba).
Careful guys, this Guitar worshipper is not Muslim. He's gas-lighting you 😅.
Very well explained. A lot of learning for Islamic Finance Students here in the video
Thank you for starting this conversation. I must say that the analysis of the issue of insurance does not follow a proper fiqh issue analysis. First , it is important to identify the nature of insurance and what is being sold. The majority say that you are paying premiums in exchange for the promise of a payout in case of a claim. If this is the object of sale then we have 3 issues : riba , gharar and maysir. The issue of riba (which was not mentioned in the video ) is that you are paying x amount of money and (possibly)receiving y amount in the future in the event of a claim. This is the definition of riba as money for money transactions must be immediate and in the same amount in case the currency is the same. Second , the gharar (contractual uncertainty) does not relate to the terms of the insurance or how likely it is that the company will have to pay a claim , rather it relates to the fact that you are paying premiums and you don’t know if you will ever have a claim and you don’t know how much the claim will be. This is contractual uncertainty where you are paying for something that you don’t know will materialize or not. Finally , the maysir or gambling argument is simply that you are paying a small amount of money with the potential of getting a large payout.
Those who approve insurance say that you are actually buying the “security” or the commitment and not the actual payout. But this argument has been refuted by the first side.
The security guard argument has also been refuted as you are paying for his time and not “security” although the sense of security is a byproduct.
In my opinion this video is way too simplistic of an argument and is a bit misguided as it does not really do a good job of presenting a scholarly and accurate view of both sides.
Thank you for a very balanced view and backed up with Hadith,
I am amazed that in the video Brother only talked about the Garar while he completely ignored Riba which is the main problem and the reason the Islamic Scholars don't allow insurance; the problem is the insurance companies don't just keep the money to themselves and gave it to the needy like in the 100 camels example but they sell that money on a higher interest rate and earn a lot of money from which they also give some of the money to the insurer, I don't know why this aspect was completely ignored in this video, Riba is completely haram in Islam in all of its forms, so I would like to know what you say about it in the context of insurance, can you please refer me to one of your videos where you talked about the involvement of Riba in insurance?
Amazing presentation. Very helpful. Thank you!
Highly rate this brother. Brought new school islamic content. Much needed in today's modern world
I enjoyed this video. Keep up the good content!
*There's a typo error in the title of the video
Mashallah great video. I myself work in insurance and agree with your points. The main difference I see between Takkaful and conventional insurance is not the insurance itself, but how companies invest the money they hold. For example a conventional company will invest in impermissible stocks and shares whilst a Takkaful company will invest in halal products.
I would also add a bit about gambling. With gambling in its true form the person enters the transaction with a hope to make a quick buck, whilst in insurance the transaction is made because the insured wants to protect an asset and in the case a claim needs to be made then theoretically he will be put back where he was before the loss event, but not in a position of profit unlike gambling. Allah knows best.
This is a really good point.
Agreed re gambling.
Agreed that where the money is invested for sure is crucial. There are a bunch of of connected issues like this which I haven't covered in this video but perhaps should in future videos/articles.
I wish that the writer of the video would take a look at how the insurance companies have destroyed the healthcare system in the US, inflating the prices and making it impossible for anyone to get healthcare as long as they don't have insurance. The number one cause of bankruptcy in the US is medical costs, and it is all because of private for-profit insurance. On the other hand, see how public non-profit health insurance (a form of Takaful) in Canada and the UK is handling citizens healthcare.
Saying that both models are the same so they are both either Halal or Haram, is imho a very ignorant statement.
That has more to do with the inherent issues with the US economy and political situation. Other countries have health insurance along side a tax payer health system which just like insurance you pay into and only use in the event of illness or injury.
Blame the hospitals for making everything expensive. If the hospitals reduce their fees then the insurance will automatically be less. Look at biggest culprit
Agree with the comments above. One could monopolise any industry and have malicious intent even those industries deemed halal
I am a data analyst and this is fascinating, I have seen a different perspective when you discussed big data. However could you please elaborate on the issues regarding the investment of insurance money? As you briefly mention and it is well known that insurance companies generate profit not only from premiums but from the income from investing these premiums and obtaining interest/profits from non shariah compliant stocks/funds. Barak’Allahu feek
From what I understand, it is insurance companies’s headache. Not ours. We are only paying for our protection. Nothing else.
Masha Allah a very relevant and informative videos for a Muslim like me working in insurance. I came to Dubai in 2016 after I finished my masters, looking for a job. I was in a dire need to get a job and after applying for many jobs I finally got an offer from an international insurance broker dealing with medical insurance.
After getting supportive and non-supportive opinions of many relatives and friends I finally decided to follow my instinct to accept the job with the intention that after getting a work experience I would change the industry. Actually I liked the job and I was progressing in the field and even did a certification from CII, however I always used to have some room of doubt thinking that is this job permissible in front of Allah and I used to research again looking for the right answer.
Alhamdulillah I completely agree with the point that you mentioned in the video with the examples given like the security guard. I have other examples I used to see from my view, isn't a first aid box we keep it home, workplace or car is a kind of security to be used at the time of emergency, isn't a fire extinguisher a kind of security we pay for a security? By dealing with medical insurance contract with clients on a daily basis I know it is very clear and our duty is to make sure clients understand the clauses clearly and are not misguided.
People from other industry would criticize the investment insurance would not be permissible and I agree if they do it in a non permissible business like alcohol or banks ( I honestly don't have the information where my company (UK based firm) is investing Wallahu a'lam.
Thank you once again I will watch now your other videos
Salaam brother good to hear your point of view.
But the security guard example (analogy) does NOT go with Insurance at all.
Firstly, when you hire a security guard, it gets on duty immediately and is available for you as 9 to 6 or 24/7 (whatever time as per the contract).
Point to note there is NO condition in having a security guard, for example if there is a transaction or contract with the agency saying you can only have a security guard when you are ill/sick/not well (attaching a condition) then it becomes GHARAR, and not permissible in islam.
Hence the security guard example is NOT analogous to medical insurance at all.
Secondly, Regarding your first aid box, let me give you a detail explanation.
Islam considered the state of every transaction and then decides whether its legal (halal) or illegal.
For example, if you work for MNC, MNC usually keep their money in banks and earn interest and pay many employees from that interest. So is working in MNC impermissible? NO, because there are 2 tranxs here.
One tranx is your working for the MNC and they pay for your work equivalent to the decided and this is a legal tranx in islam.
Second tranx is the MNC staking their money in Bank and earning interested, this is illegal but the first tranx is not a part of second tranx hence working in MNC is completely permissible.
Coming bank to your first aid box, if you buy a first aid box, it becomes yours, you are the owner of it and the tranx is complete, you can use the first aid box whenever you want and its always with you, there is no condition of using it.. But if the seller of first aid box says that you can only use it if you are hit/injured and even if you are not hit/injured the money is for nothing that means the tranx was not atomic and didn't complete then its not legal at all.
The rules are simple:
The tranx should be atomic (you take give and take immediately), i know you are thinking about credits/loans (without interest ones), in those situation the decision or agreement is already made regarding the amount to be returned and there is no condition of paying it back.
If there is any condition then the tranx is not legal in Islam and comes under GHARAR.
one quick question; this does not apply to life insurance does it?...oh got it, you mentioned something right at the end! Jzk...great content guys, keep it up!
Mashallah, I really hope so many muslims are trying the best to understand this field of study and work before giving any fatwas. I really admire your work. I have just a question for you my brother, what do you think of the fact that most of the insurance companies are allocating the funds pooled into money market securities with fixes income (interest rates) in order to even further reduce the risk and grow the funds availabe in order to pay policyholder in any time they declare claims. Thank you!
"...They are not doing this out of the goodness of their hearts." 🤣🤣 I appreciate the honesty!
Great video brother, thank you so much
What a great informative video, thanks for the great work you guys are doing
jzk khyr Mustafa
Only allah can give us security allah is the protecter ,allah is the one who gave us all....
I studied insurance and I never felt anything wrong in property insurance until I heard on a rutba that it was haram. The fact that this tuesday I have a job interview with a big insurance company for a position in professionnal property insurance but I don't know what to do I think I will go and I ask Allah to make me fail if it's not a good thing for me after this I don't know what I will do for work Allah knows better
how did. it go bro
Assalamo alaikum brother ...
Can you please explain that whether
1) Unit Linked Insurance Plans (ULIPs) haraam or halaal ?
2) Is Guaranteed Additions( GA) provided in certain insurance plans haraam or halaal
and last and the most important
3) Is working in insurance companies as salesman halaal or haraam
4) Do you know of any job in insurance sector which is clearly halaal.
I'm a little confused about life insurance.
Is it ok to have a life cover?
ALLAH INCREASE YOUR RANK BROTHER. YOU ROCK.
When is the video on life insurance. Coming up?
Wretched logic to justify something is clearly haraam . Modeling on big data is called predictive modeling which means it is something uncertain
Salam brother, what about interest on payments if you can't to pay in full?
Jazakallaahu kheir brother Ibrahim.. Super awesome analysis. I absolutely love your videos, However, I have a few points which you haven't mentioned that play evidence for those who prohibit Insurance. Maybe you can clarify further.
1- Firstly from the consumer's perspective who doesn't get into an accident at all? And that makes it the majority of people who don't get back what they've paid for because in reality most of us don't get/incur accidents. So when we are accepting insurance, that in and of itself at the very onset entails a very high level of gharar.
2. Secondly you didn't touch the elements of Riba and gambling that conventional insurance entails.. What happens to that?? That too is a very strong case for those who lean towards its prohibition.
But can we call it gharar tho when we are certain that the insurance company will pay me the service to fix my car? No. The certainty is in the contract, the insurance company agreed to pay for whatever money I need to fix my car in case I needed a car fix.
Thanks for the video brother. Is Funeral insurance OK to have or is it haram?
But insurance company after pooling the money can invest into various asset, stocks (may not b sharia compliant) or perhaps even fixed income involving riba so as to protect ther initial investment.. and they will use this riba plus profits for payouts ..
What about that point ?
Then that's their fault not yours. I can buy mobile phones from a shop and that shop can give their employees a treat of non halal food and maybe even pork. I don't know how people spend the money once I complete my transaction.
Can we buy life insurance only for tax exemptions purposes alone??
Salaam
Can you provide a list of takaful companies in the uk.
Jazakallah
Unfortunately we are not aware of any at this moment in time.
Life insurance video. ...plz... Waiting for it.
*Starts with music.*
"We take the majority fiqhi view."
Please do a video on
Life Insurance
The issue is is that even with the huge amounts of data insurance companies have at their disposal, they will still extrapolate the future based on that information and past events. One could make the argument that depending on how many litres of water, weight of food and external factors cattle are exposed to, one could very accurately predict the amount of milk and meat a cow will produce. This principle can also apply to fishing, cultivating land and other material assets. There’s no certainty in what the future holds with regards to assets and ownership thereof and regardless of the amount of data you have available, you can only mitigate possibilities rather than predict them with exactitude. Thus, in my understanding, the gharar argument for insurance is still dubious.
Btw, I love this channel and the work you all are doing. The Muslim community definitely needs more CZcams material like this to access and I have benefitted from watching your videos. Please keep up the good work!
What we find is a lot of people are fixated on their opinions that they heard from their preachers and parents. If one has done his best research and take guidance then is convinced it's halal then Allah knows best. That way brother one can't work in Real Estate because all Real Estate Developers take huge loans to build out the communities or buildings which involve massive Riba, sell off plans which are not built and have element of Gharar and then charge atrocious profits which are haram. I can literally turn any industry halal. So I reckon we all do our research, know we are answerable to Allah. As a Muslim, we should use our own intellect, the religion is not governed by others, just directly by God
insurance done as per Islamic principles can be a great instrument of promoting well being in society. It is as simple as people coming together to pool funds that is managed and utilized to cover damages. Contributors maintain their share in the fund based on original contribution and depends on the size of the fund at a point in time. This fund also promotes economic activity through investments.
Whereas conventional insurance approach is rather based on maximizing profits. The premiums are no less than interest as the insurer receives it regardless of payout. No matter how advanced ‘Big Data’ models are used there is always going to be an element of gharar.
Jzk khayr for this comment - perhaps I should have made it clearer in the video - we really like takaful insurance and think it is morally better than conventional insurance when done properly.
If there is a takaful option - Muslims should use that ahead of conventional.
@IFG im in a country where there is no takaful options at all. So is it ok to go with conventional insurance especially critical illness plan and medical plans?
Makes sense, except for the investment of money in interest based things.
Thanks for this info where is your on Life insurance video 🎥
Insurance company often find ways not to pay-out...So how can we be sure that they will certainly pay-out when the time comes? This is a big worry for me when it comes to Hibah Takaful...can you please enlighten me on this?
& Another thing is, after say 30years of paying premiums and not claiming, the money gets burned or if returned, only a small percentage. How is that islamic?
Thank you very much. Appreciate your explanation.
There are restaurants that serve old food, are all restaurants haram?
you didn't mention about the riba involved in the investment of the insurance companies
How they use the money is uncontrollable and their sin.
@@NineSeptims Not really bro. Because when you invest on something you have the liability of how they make money. For example what the conventional banks do is they make profit out of interest and that's why we are not allowed to even work at those banks as well as not allowed to take profit.
Making a knife is not a sin because someone else buy the knife and killing people but rather knife is used for something else as well primarily.
Selling grapes is not a sin as it is a fruit used to eat majority BUT, if you knowingly sell it for someone who is making wine out of it, it is becoming haram to sell grapes in that context. There is a thin line differentiate the ruling. It is totally subjective and contextual.
@@NineSeptims To some extent you are correct. If their major operations are within the circle of halal as per to our knowledge, then what you tell is correct. We don't need to spy what they do seriously to deep level. It is an unwanted act in islam but as a general view what they do is counted and matters
No doubt about your knowledge and intelligence therefore can claim as islamic finance guru. The real problem is too many people trying hard to get it similarities rather than too little that defending and feel they have responsibility to make difference between islamic finance and conventional.
Many thanks for your comment. We don't claim to be an "islamic finance guru" by the way - the website is called IslamicFinanceGuru - the website is a platform for everyone.
how about selling health and life insurance is halal or haraam
Great video! Can you please do one on life assurance as well. Given that blood money was given for a life taken seems a good argument for life assurance. As well it becomes a great source of comfort for the surviving family members. Would love to hear your thoughts.
iA we will do at some point!
@@IFGuru Salaam brother good to hear your point of view.
But the security guard example (analogy) does NOT go with Insurance at all.
Firstly, when you hire a security guard, it gets on duty immediately and is available for you as 9 to 6 or 24/7 (whatever time as per the contract).
Point to note there is NO condition in having a security guard, for example if there is a transaction or contract with the agency saying you can only have a security guard when you are ill/sick/not well (attaching a condition) then it becomes GHARAR, and not permissible in islam.
Hence the security guard example is NOT analogous to medical insurance at all.
Secondly, let me give you a detail explanation.
Islam considered the state of every transaction and then decides whether its legal (halal) or illegal.
For example, if you work for MNC, MNC usually keep their money in banks and earn interest and pay many employees from that interest. So is working in MNC impermissible? NO, because there are 2 tranxs here.
One tranx is your working for the MNC and they pay for your work equivalent to the decided and this is a legal tranx in islam.
Second tranx is the MNC staking their money in Bank and earning interested, this is illegal but the first tranx is not a part of second tranx hence working in MNC is completely permissible.
For example first aid box, if you buy a first aid box, it becomes yours, you are the owner of it and the tranx is complete, you can use the first aid box whenever you want and its always with you, there is no condition of using it. But if the seller of first aid box says that you can only use it if you are hit/injured and even if you are not hit/injured the money is for nothing that means the tranx was not atomic and didn't complete then its not legal at all.
The rules are simple:
The tranx should be atomic (you take give and take immediately), i know you are thinking about credits/loans (without interest ones), in those situation the decision or agreement is already made regarding the amount to be returned and there is no condition of paying it back.
If there is any condition then the tranx is not legal in Islam and comes under GHARAR.
@@Web3dopaminethe example of security guard is correct. When you hire a security guard, the service of security will be activated only when you need to be rescued. The same with when you hire a personal doctor like how rich ppl do, the service of the doctor will only be activated when you are sick. The same with incurance comapnies, you are hiring insurance company and their service will only be activated when you are in need with things you agreed upon.
@@Web3dopaminethe first aid box is incorrect anology. When I hire someone, although I'm paying monthly, they will only do their job according to contact, I can't use them as I wish nor when I want, they are bound by contract, and their job descriptions is something limited. The insurance company is same, when I hire them, they will serve me according to the agreement, I can't use them as I wish nor when I want. Their service to me will be bound by the contract we both agreed upon.
@@OO9O9 what if the security gaurd runs away? That’s not the case with insurance
Aswalamualaikum
I have been working for a company where I process salary to the employee for a company that provide the risk consultancy and insurance brokerage and claims advocacy is this a halal income for me ?? Pls help
I join a company that do different kind of financial services, one is life insurance, i was told it is haram , can u help me out
Thanks!
When you pay for insurance
You pay for protection
As long as they will protect you in the future if something bad happen then
Is life insurance halal.?
Is working for FDIC haram if you are focused on consumer protection and community affairs?
Salam. Could you plz do a video about life insurance being halal or haram. Jazaak Allah haira
Access to historical data does not make it halal when the Prophet explicitly made it haram brother.
Is working for an insurance company as agent halal? What about the income you get from working as agent for the insurance company? Halal or haram?
What we find is a lot of people are fixated on their opinions that they heard from their preachers and parents. If one has done his best research and take guidance then is convinced it's halal then Allah knows best. That way brother one can't work in Real Estate because all Real Estate Developers take huge loans to build out the communities or buildings which involve massive Riba, sell off plans which are not built and have element of Gharar and then charge atrocious profits which are haram. I can literally turn any industry halal. So I reckon we all do our research, know we are answerable to Allah. As a Muslim, we should use our own intellect, the religion is not governed by others, just directly by God
Allah knows best.
What about interest and gambling involved ?
What if the insurance company invests in things that are haram
What about life insurance?
isnt there gambling in conventional insurance?
My Question is that Earning of Call Center Industry that works for American Final Expense Life Insurance Company as a Third Party in Pakistan is Halal or Haram?
Is the security guard for the asset or the people ?? Regardless, a security guard plays an active role in defending, guarding, watching an asset/person.
Much like a guardian dog protecting its flock from wolves.
One of the main reasons dogs are such good flock guardians are not that they can fend off a wolf or two ( which they probably couldn’t; the same case with a security guard when faced with armed resistance) but that they DETER and prevent incursions from the offset.
Their is an active role of the risk preventer, whereas taking insurance does not make you any more or less likely prone to an adverse event.
Maybe im nit-picking at the analogy, perhaps a security camera example would be more succinct. Although cameras are used modify behaviour as well.
Brother can you make a video on derivatives trading especially options cz in it's broad sense options are quite similar to insurance and most ulama consider it haram due to gharar and maysir wheres of we see the exchang mitigates the gharar of contract ratification and proper analysis and strategies take out the point of maysir and the only uncertainty left is the price and volatility of the underlying asset
I am form India. I want to work in export company that is doing halal work. But they take marine good insurance of the goods they export, is it permissible for me to work in the export company
Yes it is not your goods and you didnt get that insurance.
I support your view. The mistake Islamic scholars make is in their focus on the "uncertainty" (gharar) in conventional insurance contracts rather than the overall risk position of the client, as we do in risk management. Insurance is a contingent claim; consequently it cannot be equated to a random gambling event. Those who engage in gambling exhibit risk preference. The purchasers of insurance exhibit the opposite preference, risk aversion.
But the security guard example (analogy) does NOT go with Insurance at all.
Firstly, when you hire a security guard, it gets on duty immediately and is available for you as 9 to 6 or 24/7 (whatever time as per the contract).
Point to note there is NO condition in having a security guard, for example if there is a transaction or contract with the agency saying you can only have a security guard when you are ill/sick/not well (attaching a condition) then it becomes GHARAR, and not permissible in islam.
Hence the security guard example is NOT analogous to medical insurance at all.
Secondly, let me give you a detail explanation.
Islam considered the state of every transaction and then decides whether its legal (halal) or illegal.
For example, if you work for MNC, MNC usually keep their money in banks and earn interest and pay many employees from that interest. So is working in MNC impermissible? NO, because there are 2 tranxs here.
One tranx is your working for the MNC and they pay for your work equivalent to the decided and this is a legal tranx in islam.
Second tranx is the MNC staking their money in Bank and earning interested, this is illegal but the first tranx is not a part of second tranx hence working in MNC is completely permissible.
For example first aid box, if you buy a first aid box, it becomes yours, you are the owner of it and the tranx is complete, you can use the first aid box whenever you want and its always with you, there is no condition of using it. But if the seller of first aid box says that you can only use it if you are hit/injured and even if you are not hit/injured the money is for nothing that means the tranx was not atomic and didn't complete then its not legal at all.
The rules are simple:
The tranx should be atomic (you take give and take immediately), i know you are thinking about credits/loans (without interest ones), in those situation the decision or agreement is already made regarding the amount to be returned and there is no condition of paying it back.
If there is any condition then the tranx is not legal in Islam and comes under GHARAR.
@@Web3dopamine You cover quite a bit of ground in your comment, and I notice you make several statements such as "it is not permissible in Islam", "its not legal", "the tranx is not legal in Islam ... ". When we look through the Quran and sunnah, we see there is very little to go on for risk management. There are references to games of chance, and such things as unborn calves, and the catch of a diver - obviously things where the outcome has considerable uncertainty and is quite irrelevant to modern situations. Scholars have tried to analyse modern transactions in isolation drawing from these rather limited references and have come up with their conclusions. So your statements relate to the conclusions of fallible Islamic scholars, not really from the prophet or the sunnah.
The transactional approach of many Islamic scholars is the wrong way to approach risk management, because it is the overall risk position of the individual, not of each transaction in isolation, that matters. Insurance contracts do not have random payoffs like gambling, they are structured precisely to offset event risk - which is a reduction in gharar for the individual, and that is a good thing. They are called contingent claims. If Islamic scholars want to get involved in this field, they need to demonstrate understanding of risk pooling, contingent claims, and negative covariance.
The security guard analogy relates to property insurance, not medical insurance. The similarity is that you pay for the security guard whether there is an attempted unsuccessful break-in or not. You pay insurance whether there is a break-in or not, if there is you replace your stolen articles with the insurance money.
So in both cases you are made whole.
Your statement "If there is any condition then the tranx is not legal in Islam and comes under GHARAR." where does it come from - and in any case I would disagree with it.
@@roberthannah7983 i am not from england so my English is not great, but the reason I used "it is not permissible in Islam", "its not legal", "the tranx is not legal in Islam ... ". such statements is I don't like throwing HARAAM word everywhere, even the greatest imams were scared to throw away that word on every occasion. But to make its simple it all means HARAAM.
Also I think your tone of labelling every Islamic scholar fallible is really not accurate, and think the person in the video (Ibrahim khan) and you, with all due respect not fallible? Honestly, I am not a fan of Islamic scholar just sitting in masjid and throwing fatwas, I have been way critical of them perhaps more than you. But just labelling them fallible is not a good thing. Also how did you come to conclusion that I am from taking anything from Quran and Sunah, There are so many hadiths on GHARAR, you too obviously know about it. Also can you present Quran and Sunnah since you claimed it?
I am working (as a software consultant) in one of the prestigious audit firms, so I understand to risk to certain degree.
Regarding your second point, you need to identify each tranx in the insurance, I think there is a confusion between pool tranx and individual tranx. Also you have yourself mentioned there is GHARAR ( "which is a reduction in gharar for the individual" ), but in a reduced form, now who will decide to what degree GHARAR is permissible? As per your statement you have mentioned it permissible, can you support it with Quran and Sunnah?
"If Islamic scholars want to get involved in this field, they need to demonstrate understanding of risk pooling, contingent claims, and negative covariance. " I completely agree on you with this point, but I think I get enough info from them that makes it impermissible (HARAAM).
Regarding your third point, let me ask you one question and then it clears out insha'Allah,
Firstly, Ibrahim mentioned it for medical but you have made it analogous to property.
Getting back to the point, when you pay for property insurance and nothing happens to your property, where does the money go?? It gone right??
You don't get anything in return and its as good as not having insurance. :). Now lets consider risk position and for argument sake that we know we loose money if nothing happens to property... but we get a security against an UNKNOWN AND CONDITIONAL RISK and.....
This is what GHARAR IS my friend :)
In security guard tranx, you get the guard immediately and there is no CONDITION OF USING IT, that's why the analogy is not accurate. Also what will you do if security guard runs away, if he gets scared in case of break out lol ??
I can give you one more example, you buy an iPhone and don't use at all, its still yours and you can use it whenever you want, in emergency or not in emergency :)
but if the apple company tells you, you can only use it if there is an accident or emergency and if there is no emergency, your money is for nothing, that indeed sounds clearly like GHARAR.
to break it down to you even more, when you do a transaction, the transaction should be atomic, the thing you purchased or the deal you concluded should be settled immediately. And there should be no condition. Now again, i understand, your point, what about the RISK, even one of the party in the transaction runs away or steals or not pay back. (And this is one tranx). Now to safeguard your interest and all parties interest in your tranx, you can hire a lawyer, make a bond, have settlement parties and pay them some amount. They immediately provide you with all the services like lawyer will help you with a bond and stuff whatever he is good at. NOW... if still one of the party in the tranx cheats, then you have to pay more to the lawyer and get more service and there is no condition of using it.
P.S. i hope you get the point and this is the biggest point though mentioning it last. Islam also teaches us Tawaqal after taking all pre-cautionary measures indeed.
@@Web3dopamine It has become an interesting discussion.
So in reply first of all to "haram" and "its not permissible" I agree its the same thing and I appreciate your clarification.
As for "fallible" - my meaning is that every human is capable of making mistakes, but of course we hope that each of us is right most of the time. I dont think any scholar would claim that they are personally infallible but they try to do their best with their understanding. I think most of the debates among Muslims are not whether they are right or wrong, but whether the things they assert are limited by history or whether they are eternal. As you say, we agree then that there are many fatwas we are critical of, and so scholars are fallible, as are each of us and Ibrahim Khan.
"Quran - Sunnah - hadiths on GHARAR" - my point is that there is very little of relevance that I have seen in these sources. And there is no recognition or discussion of concepts like risk pooling and risk offset by Islamic scholars. They often say insurance contracts are like gambling, while I would say they are the opposite - insurance shows risk aversion, while gamblers exhibit risk preference, such as the addicts of casinos. However I am sure everyone through the ages knows about rudimentary diversification ideas as in the saying "dont keep all your eggs in one basket".
So - I believe Islamic scholars have little to contribute to the insurance discussion apart from basic concepts of ethics such as honesty and clarity of contracts.
Your comment - pooling vs individual contracts - the pooling of course occurs at the level of the insurance firm. They are able to pass on the diversification benefits of risk pooling to the individual contract (as does takaful - same concept) . GHARAR in life and what is permissible - well of course life is full of uncertainties, the purpose of insurance and takaful is to reduce some of them, which they do, and that is a good thing.
I have copied you comment here "Now lets consider risk position and for argument sake that we know we loose money if nothing happens to property... but we get a security against an UNKNOWN AND CONDITIONAL RISK and.....
This is what GHARAR IS my friend :
I agree with you 100% - we get security against unknown risk with insurance or takaful, so thats a good thing. We reduce or eliminate Gharar. That is worth paying for.
Your comment "thing you purchased or the deal you concluded should be settled immediately" I dont agree. Most service contracts are performed over time and paid for periodically. We buy online and get things delivered in a few days. People buy and sell stocks on the stock exchange with delivery usually in 2 days (it used to be longer). You can subscribe to a new stock or bond issue and it can take much longer - weeks. What is important is the certainty - is settlement guaranteed by a major retailer or a clearing corporation. This is far different from the uncertainty of unborn calves or prospective crop harvests from the time of the prophet - which is how this wrong-headed scholarly thinking emerged I believe.
On ahadith, I am rather skeptical - Bukhari and Muslim had an impossible task to sort through thousands of ahadith over a hundred years after the first narrations and determine the authentic ones, especially since Caliph Umar is said to have prohibited the writing of ahadith.
Lastly, I wish you well at the audit firm. Audits are one way of finding the cheats, deterring them, and making them honest. I have been on the other side of audits and I respect what auditors do.
@@roberthannah7983 Regarding my this statement "thing you purchased or the deal you concluded should be settled immediately" on which you don't agree on, I clarified in the beginning but I think the point was missed.
By the above statement, It does NOT mean all money is to be paid instantly as is not in the case of loans and credits and instalments (which are halal, without interest ofcourse). It means the deal amount should be finalized, how much the payer is going to pay whether in 3 or 10 installments and the payee is going to receive, irrespective of any SITUATION OR CONDITION. Its another case if the payee forigves the amount prolly because payer cannot pay back for any reason.
Coming to few conclusions, since our discussion.
There are 2 points that goes in favour of insurace.
1) Insurance is RISK AVERSION rather than risk preference as compared to Gambling (as the point you made)
2) Also other favourable point i am aware of is A gambler would love to win and use his Gamble money, unlike in Insurance no one wants to use it, in any condition, well... no one wants to get ill, under any circumstances lol.
Unfortunately, these 2 points are not enough to remove the high degree are GHARAR and in the end make it halal. I thought on the second point a lot but i don't think it makes insurance halal.
Also now lets stick to the first point regarding RISK AVERSION, where there is v little contribution and understanding of Islamic scholars. I already mentioned that there are so many other ways to have RISK AVERSION, in doing transactions such as hiring lawyer, security guard etc... I know unfortunately, there is no RISK aversion when it comes to medical emergencies for ummah except for conventional insurance but that does not make conventional insurance halal. we could rather work on it, build a platform etc.
there is one more point that no Islamic scholar has put some light on.
3) What if a Muslim does not take medical insurance because Islam prohibits it and gets ill/injured and does not have money to do treatment and dies and he was the sole bread winner of the family. Or even if the person does not die but goes in debt for a huge amount then?????? We need a proper argument on this.
In the end, A Muslim, also have Faith in Allah SWT (tawaqqal) which helps in avert and manage risk. Rest, Allah knows best.
Also i am not working as an auditor, so i don't catch anyone lol.But if you are keen to work on a platform a completely segregated from conventional insurance then let me know. you can message me on telegram @DAOdAppDev
I have left Forex trading because of you..... I also join EBL Pakistan but I am confused if the earning gain this business is halalla or harammm..... I have a great need of knowledge about this... God bless you
But why would you base your decision by just looking at gharar and not the fact that we got to pay little while receiving more of it. If I had to take up medical insurance in my country, I would just pay around $300 annually, a premium that could cover the cost of a treatment worth $2000. Is this permissible? We pay a certain fixed amount monthly or yearly to security companies who employ guards at our service and that also depends on what types of services we require such as VIP, armed/unarmed guards, bodyguards etc. We cannot pay for the service of an unarmed guard while expecting that of a VIP security, which is what the case is with medical insurance.
Yes because there is a chance you won't claim for a year, two years, three years, etc. And also insurance in most case covers damages and principle of insurance is not produce profit.
Is life insurance or medical insurance permissible or impermissible??
you didnt watch the video. he said he will do a different video for life insurance
If this view is adopted, does it mean it is halaal to work in conventional insurance?
What about the money that you give insurance and they invest in haraam stocks or give it away for interest?
all companies and government got debt or invest. what is important is if it's primary operation of the company or not. Take example. Fedex. They do shipping and they sell insurance and they invest profit. No one will tell you it's haram to work at fedex
Most of the companies investing in stocks are actually investing in companies making profits....this is an aspect of business profit not interest... financial security is never wrong... islam says to farmers... save for next few years for u foreseen drought....insurance gives you same security...
Its either you have to be very rich, very pure, never have an illness in your life.. as a muslim like just never fall sick
Money in exchange for money is RIBA, secondly insurance is a form of gambling .. Its a double HARAAM.. Stop misguiding people
All praise belongs to Allah alone.
Dear brothers, there is a great demand in the Muslim community to make insurance, mortgage etc etc halaal.
Where there is demand there is supply!
Once someone comes and makes intellectual sounding arguments and makes impermissible into permissible, our guilt conscious is gone and it gets easier to self justify.
Why are you grouping mortgages with Insurance ?
My brothers and sisters, be very carefully of this video as its deliberately portrays insurance as halal.
He mentions the fact interest needs to be looked at, at the begining of the video, but never talks about it.
Most insurances deals with interest.
Can you please explain which types of Insurance are permisable in your view?
Computers programmes will never ever take away the aspect of uncertainty and then saying something is halal because the computers are soo powerful and that it can reduce the uncertainty. Then in the future if a person comes to you and Says, my computer software is sooo powerfully that it can 100% give you the correct answer all the time in card gambling, in the machines, in poker etc etc, will that increase the permissibility of it.
Like you said at the end of the video, when a country legalises a certain insurance and you have no other choice, other than going prison, then that will change permissibility.
As BAME Dr - eagerly awaiting your life insurance video please..!
Can you be contacted re the same ?
Attempt to address the riddle is appreciated. However, by not analysing type of investment Insurance operators make for profit an important aspect of RIBA was excluded in this video. Before releasing video on such sensitive topic it should have been checked for its completeness. Hope, complete video would be released and this incomplete video withdrawn immediately.
Let's be the means to guide rather than misguide!
May almighty Allah guide us all on the right path.
Where is the money invested is the question !!!
I recieved one proposal from a guy working in an insurance company as a claims analyst, should I marry him??
claims analyst, is the most hated person on earth.
By this logic, life insurance should be halal, because it relates more to the case of blood money, than other types of insurances.
make a deatiled video on network marketing
A year later, where's the video on life insurance? That's important and need to be discussed, too.
life insurance there is no dispute about it. everybody agree it's haram
@@AhmedAhmed-yu5mz what about term life insurance?
@@kenshinzu_ everybody agree life insurance is haram. Anyway I didn't find someone telling it's halal. maybe if you search more you might see the opposite opinion but I am telling what I found so far.
He made article
While my opinion is definitely not one supported by lots of research I have always felt that the lack of insurance was an unacceptable risk. Meaning if my house burnt down the loss to me and my family would be too great. Of course Allah provides but I must also make sure that I ensure to the best of my ability to mitigate all risks.
Secondly I've always felt that by purchasing insurance I am actually purchasing something it's a contract a promise signed into a document with clauses and clear stipulations.
We also sign documents with clear stipulations while taking interest based loans from banks. Does that mean anything? How about putting aside one's savings to mitigate the risk of losing one's house and putting trust in God. How much is the element of risk in it anyway?
@@cashmerianacontenderia3677 As I watched this video, I didn't find any compelling argument that even for a second convinced me that traditional insurance is halal. his point around "they are not doing this out of the goodness of their heart" should sum everything up. The major fact around is what the insurance company does with the monthly premium you pay (I'm almost certain that it gets invested in non-halal ways ie. interest is involved) was completely omitted from this discussion.
@@afzalnak even if they spent it in halal ways, the contract itself is dubious. The insurance institution is clearly an extension of banking system.
It is a sale of uncertainty. Insurance policy is not a maal. 2nd in takafyl you share the risk in ins. You transfer the risk. The ooerating nodel is totally different. Then your examples appear to find evidence however they lack scolarly wiyas approach. This way i can eqate loan to murabaha purely from economic perspective
Many thanks for your comments.
Takaful is in our view not sufficiently different in the expectation it creates on the part of the insured from that expectation that is created on the part of the insured in a conventional insurance context. Both expect and feel like they are legally owed to be paid out.
We respectfully disagree on the murabaha - loan analogy. There the risk profiles of both transactions are different (and where they are not sufficiently different - in the case of tawarruq for example, we do not like those transactions) and so there is a clear difference between murabaha and a loan.
In the case of takaful and insurance there is little difference in the risk profile. Islamic finance and the sharia is not a matter of word-play. It is a matter of what is tangibly different in the real world. In our humble view there is nothing materially and tangibly different between the experience of the participants in a takaful insurance and conventional insurance setup.
@@IFGuru this is what I experienced as insurance and takaful agent. In Malaysia, the takaful system is widely promoted. However, as far as I know, the insurance product that I choose to present is actually the same. The premium is divided into cost of insurance/wakalah in takaful, charge of insurance/tabarru in takaful (pool of fund between insurer to pay claim) and investment which we have shariah compliant fund for Muslims customer. The premium will not charge with any interest for late payment except the policy will become lapse which in my view is similar with takaful. I heard they argue with aqad. But for me, the basis for aqad is offer and acceptance, and as long as there are no riba, uncertainty and gambling, I don't see why the product is haram. I think many would be agree, not all takaful client understand the concept of takafala. I choose the represent both takaful and insurance because there are huge difference in price and benefit. Some will argue, but some will take some effort to listen and ponder.
Correction not pool of fund between insurer, but the clients.
The security guard provides security by just his presence there's no gambling there
Assalamu alaikum!
In Islamic finance, offering an excess amount beyond what was initially borrowed is permissible only if such an arrangement was not stipulated in advance. For instance, if I borrowed $100 from my brother, I could return $120-as a token of appreciation-only if it was not explicitly agreed upon at the time of borrowing that I would have to return $120. This agreement should not be established contractually, verbally, or even assumed by either party at the time of borrowing. It is crucial to understand the rules of Shariah deeply, as misconceptions you are saying can lead to misleading our brothers and sisters in Islam. Claiming that conventional insurance is permissible without thorough knowledge underscores the importance of this understanding for you!
It seems like a silly question maybe but is it worth takaful insurance by myself or would it be permissable to get life assurance with my workplace? 🤔 I never even considered it before as it was a untouched topic that seemed certain to be haram but your points have always kinda crossed my mind growing up but I am still quite young and early days in the workforce. But I would rather be smart and plan financially, ofc Allah is the best of planners but I always reflect on the tie the camel hadith.
Sir plzzzzzzz make a vidio on EBL pakistan plz 🙏🙏🙏🙏🙏🙏🙏
food for thought; however, is it a good food for thought??
the questions:
- isn't 'in my humble opinion' a problem?
- why narrate select hadiths? are you sure you didn't miss other ahadith? what about ayat?
-- why why you come up to public 'sharing your opinions'? why not go to the scholars, real scholars, and explain to them and reason how this 'insurance' work? how is that similar to takaful? or can it be resembled with the 'security guard' exemple? and let them, the ulema, a committee of mufties, to 'tell us'. You telling people about these and employing ahkaam can cause confusions and raise many questions un-answered.
But what about Riba or Internet?
Please send in Hindi
In my view - Insurance in any form (Car / Health / Life) is Haram ... no further argument. because it involves RIBA. If an insurance company is not involved in RIBA then it is permissible (this is applicable only in the vast muslim countries) if a company where you work is paying an insurance premium from their own pocket and gives it you as a benefit of being an employee, is permissible. but if the company ask/force you to buy it then it is not. you can very well opt out of it. (10 out of 9 company does not force their employee to buy the insurance). - Other than this, The Takaful insurance is permissible hence every muslim who has an option of Takaful insurance should go for it.
You just said any form is haram then say if not involved in Riba then it's permissible.
Title has too many I's grammar issues
Assalamualaikum warahmatullah
Muhammad Qasim's Dreams is for all Ummah, Allah SWT and His Messenger PBUH tells Us in His Dreams to spread this Dreams all around the world, Allah knows best
please kindly learn about His Dreams
All Muhammad Qasim's Dreams about Imran Khan already comes True, then Dreams about Pakistan, the rise of Islam, end Times, Dajjal, Isa PBUH, yajuj majuj will also come to be happened.
JazaakAllah Khairan
you are bogus , bitcoin guys
So the Prophet(s.a.w.) says do not buy something which involves gharar/riba; and you say okay, right, but let's look at the numbers. Do you put trust in the words of the Prophet (s.a.w.) or numbers/arithmetics when you make a decision?
we all can have a 'really good idea' on average what kind of oil volume is going to be extracted in Russia, for example...but then pandemic hits, and demand for fuel drops. Where is your numbers 'telling you' then? It is for a reason, Prophet (s.a.w.) forbids transactions involving gharar,riba etc.
you have no knowledge in islam, then how you named yourself islamic finance guru? who approved you?
so many of today's scholars give rulings based on very silly (even ignorant) opinions and one example is when they say that insurance is like gambling. I dont mind paying insurance for my car and if there is an accident the cost of repair is covered thereby saving me a lot of money.. its not like im winning a lottery jackpot!
Ittakhillah
Auto insurance is haram in modern day products. Especially in the west.
Do you well educated in Islam, or you pretend that you have knowledge? Please do not speak by yourself.
Its HARAAM!!!!
So, here,I ended up with my stressful evening. I accepted a job offer as an insurance agent selling or signing up commercial business and buildings without doing my homework if it is Halal. Is it Halal or Haram to be a commercial insurance seller ? Please reply. That would be greatly appreciated.I will resign tomorrow anyways and boy, it's hard to do.
All praise belongs to Allah alone.
Dear brothers, there is a great demand in the Muslim community to make insurance, mortgage etc etc halaal.
Where there is demand there is supply!
Once someone comes and makes intellectual sounding arguments and makes impermissible into permissible, our guilt conscious is gone and it gets easier to self justify.
Please do proper research before making such video. This video is misleading.
Be wary of accepting religious advice from a person who doesn't say SAW after the prophet's name