Life Insurance is Haram

Why conventional Life Insurance is Haram

Objections raised on Conventional Life Insurance

Apart from the commonly held view among Muslims that life insurance is not permissible in Islam on the grounds that it reflects disbelief that God has decreed the moment of one’s death, or distrust in God’s providence, some Islamic scholars and many Muslims take a strong view that life insurance is totally prohibited in Islam because of the way life insurance is operated in the conventional system. Conventional insurance contains elements that are not in conformity with the principles of Shari’ah:

Riba: Interest

·         A life insurance policy under the conventional system contains elements of riba where premium income is invested in interest-bearing assets and securities.

·         An element of interest also exists in conventional life insurance products – as the insured, on his death, is entitled to get much more than he has paid

·         Insurance funds invested in financial instruments such as bonds and stocks contain an element of riba. Takaful contributions paid by participants/policyholders under a Takaful scheme are operated on the basis of mudarabah (profit-and-loss sharing) free from elements of riba.

Quran - Allah is All Merciful

Dua - Guidance and Piety

Maysir: Gambling

·         The insured contributes a small amount of premium in the expectation of gaining a large sum

·         The insured loses the money paid for the premium when the insured event does not occur

·         The insurance company will be in deficit if claims are higher than the premiums paid when a life insurance policyholder dies after only paying part of the premium his dependents receive a certain some of money which the policyholder has not been informed of and has no knowledge as to how and from where it has been derived.

·         The idea of a conventionally designed life insurance policy is that if the assured dies at any time before the maturity of the policy, the nominee(s) is entitled to recover from the insurer the whole amount agreed in the policy. While if the assured is alive at the expiry of a permanent life policy period, the insured is also entitled to the whole amount agreed in the policy, plus the interest, dividends and bonus, subject to the company’s policy. On the contrary, the paradigm of a Takaful model of life insurance is that if the assured dies at any time before the policy matures, the beneficiary(s) is entitled to recover from the insurance company the whole amount of paid premiums, the bonus and dividends according to the company’s policy and a share of the profits made on the paid premiums, plus a donation from the company’s charitable fund according to the financial status of the beneficiary(s) (i.e. if the beneficiary(s) is financially in good condition the amount will be less, but if the beneficiary(s) is financially weak and unstable the amount could be greater). Such a transaction is considered as co-operation towards the welfare of the helpless people in society, and it is thus in line with the ruling in The Qur’an. “…Help ye one another in righteousness and piety...” [5:2]

·         However in the case that the assured is still alive upon the expiry of the policy period, the assured is entitled to recover from the company the whole amount of the paid premiums, a share of the profit made on the paid premiums according to the principle of mudarabah bonus and dividends according to the Takaful company’s policy.

Gharar: “Uncertainty”

·         The insurance contract contains excess uncertainty whereby a person pays a cash amount for payment of a claim against the occurrence of a future event when it is not known whether the event will actually take place and the time it will occur is also not known. Any form of contract which is characterized by the domination of one party at the expense and unjust loss to the other is classified as Gharar. When a claim is not made the insurance company may acquire all the profits whilst the participant may not obtain any profit whatsoever. The loss of premiums on cancellation of a life insurance policy by the policyholder, or the "double standard" condition of charging a customary short period in general insurance, whilst only a proportional refund is made if the insurance company terminates the cover is also considered as unjust.

·         In the operation of a life insurance policy under the conventional system, the payments for the agents are to be paid out of the insured’s paid premiums.

·         Whereas under the Islamic model of a life insurance policy the agents work for the company and thus they should be paid by the company itself. This means, the payment for the agents could include a share of the profits made on the paid premiums, plus dividends and bonus according to the company’s policy.

Insurable interest

·         Everyone has unlimited insurable interest in their own life and, theoretically is entitled to effect a policy for any sum assured. In practice, the cost of the policy often limits a person’s ability to insure his or her own life; a person who is married also has interest in the life of his or her own spouse. Certain people can insure the life of others with whom they bear a relationship, recognized in law, to the extent of a possible loss. Accordingly, in a business partnership the partners can insure each other’s lives, as they stand to lose on the death of one of them. In the same way a creditor stands to lose money if an unsecured debtor dies before repaying the loan, and therefore has insurable interest to the extent of the unsecured loan plus interest.

·         In a conventional system of life insurance, the nominee(s) is an absolute beneficiary(s). Suffian J., in Re Man bin Mihat by virtue of Section 23(1) of The Malaysian Civil Law Act 1956, decided that the nominee inter alia in a life insurance policy is an absolute beneficiary who takes absolutely and exclusively the benefits of the policy. In contrast, the nominee(s) in a life policy under the Takaful model is not an absolute beneficiary(s) but a mere trustee, who is in a position to receive the benefits of the policy on behalf of the insured’s heirs and distribute it among them according to the principles of mirath (inheritance) and wasiyah (bequest). In Karim V. Hanifa, The High Court of Karachi ruled that the nominee(s) in a life insurance policy is nothing more than an agent. The National Council of Muslim Religious Affairs in Malaysia, also issued a Fatwa to the same effect in 1979, that the nominee(s) in a life insurance is a mere trustee who is supposed to receive the benefit of the policy and distribute it among the heirs of the assured, according to the principles of mirath and wasiyah.

·         In other words, the insurable interest, under the conventional system it is vested in the policyholder solely, should he/she be alive upon the expiry of the policy period. However, in the event of the death of the insured within the policy period, the insurable interest will be paid to the husband or wife, parents or children, benefactor or other nominated beneficiary or trustee, company and director, partners, mortgagor and mortgagee, according to the policy. In contrast, under the Islamic model, insurable interest is vested in the assured or in the insured’s heirs, according to the principles of mirath and wasiayah.

Rational Outlook

·         Having a life insurance policy does not mean just insuring one’s life but is a fair financial transaction for the benefit of certain helpless people in society. The rationale behind having life insurance may be considered as follows:

·         It is one of the means used to provide a material safeguard for the offspring of the deceased and thus in line with the saying of Prophet Muhammad: “It is better for you to leave your off-spring wealthy than to leave them poor, asking others for help” (narrated by Sayid bin Abi- Waqqas, Companion of Prophet Muhammad)

·         It provides future material security for widows and other dependents of the deceased (assured). Prophet Muhammad in fact encouraged the provision of security for widows and poor persons, as recorded in one of his Traditions: “One who looks after and works for a widow and for a poor person (dependent), is like a warrior fighting for the cause of Allah, or like a person who fasts during the day and prays throughout the night’ (narrated by Safawan bin Salia, Companion of Prophet Muhammad)

·         It ensures that certain persons (widows, orphans, etc) will have protection from unexpected future material difficulties, which otherwise may result in hardship for those people. Prophet Muhammad advised the people to protect one another from any form of hardship and difficulties when he said to them: “Whoever removes worldly grief from a believer, Allah (SWT) will remove from him one of the grief’s of the Day of Judgment. Whoever alleviates the problems of a needy person Allah will alleviate his problems in this world and the next “ (narrated by Abu Huraira, Companion of Prophet Muhammad)

·         It ensures co-operation and solidarity among participants. It is also a positive initiative by the assured towards a positive material status for widows, offspring, etc. Hence, such co-operation towards a positive goal is, in fact, ruled in The Qur’an.

·         “Help ye one another in righteousness and piety’’ [5:2]

·         It is like taking an initiative towards ensuring a self-reliant society and alleviating hardships. It is in line with the Qur’an ruling. “Allah intends easy life for all of you, while He does not want you to be in difficulties...” [2:185]

THE RESPONSIBILITY OF UMMAH

THE RESPONSIBILITY OF UMMAH

“AMR BIL MA’ROOF WAN NAHI ANIL MUNKAR”

There is ijma of the u’lemaa’ that amr bil ma’roof wan nahi anil munkar is fard due to the explicit commands in the Quran and Sunnah and the condemnation, curse and criticism connected to those who neglect it. These two words came together in Quran ten times, and they are not separated. Just by calling people towards good may not work and will destroy the society as it has destroyed before.

(3:104) And from among you there must be a party who invite people to all that is good and enjoin the doing of all that is right and forbid the doing of all that is wrong. It is they who will attain true success.
(3:110) You are now the best people brought forth for (the guidance and reform of) mankind. *88 You enjoin what is right and forbid what is wrong and believe in Allah. Had the People of the Book *89 believed it were better for them. Some of them are believers but most of them are transgressors.
(3:114) They believe in Allah and in the Last Day and enjoin what is right and forbid what is wrong, and hasten to excel each other in doing good. These are among the righteous.

Abu Saee’d al Khudri reported that Nabi (saw) said “If one of you sees a munkar he should change it with his hand if he is not able then with his tongue and if he is not able then with his heart and that is the weakest of imaan” (MUSLIM) This hadeeth is a command to every individual Muslim to remove munkar if he encounters it, if he cannot remove it then she should forbid with his tongue and if he is not capable of this then he must at least hate the munkar in his heart and desire it to be changed.

(9:112Those who turn back to Allah over and over again; those who worship Him, those who sing hymns in His praise, those who move about in the land for His sake, those who bow down and prostrate before Him, those who enjoin virtue and forbid evil and strictly observe the limits prescribed by Allah (are the Believers who make such a bargain with Allah; and O Prophet, give good news to such Believers.

That is those who "strictly observe the limits prescribed by Allah . . . . . " in regard to the Articles of the Faith, worship-morality, social behavior, culture, economics, politics, judiciary, peace and war- in short, in all the aspects of their individual and collective lives. They neither transgress these limits in order to follow their lusts nor invent laws nor replace the Divine Law by other laws. They establish these limits and prevent their violations. Hence, the true Believers are those who not only strictly observe the limits prescribed by Allah, but also do their very best to establish them and safeguard them so as to prevent their violation to the best of their powers and capabilities.

These are limits which Ummah has responsibility towards mankind. Today what has been forbidden by law has become part of our life and what we have been to do, we have forgotten. This is exactly the reason when Ummah stop doing responsibility then Allah removed them from that responsibility.
This is what mentioned in Quran.

(5:78)Those of the Children of Israel who took to unbelief have been cursed by the tongue of David and Jesus, son of Mary, for they rebelled and exceeded the bounds of right.
(5:79)They did not forbid each other from committing the abominable deeds they committed. Indeed what they did was evil.
The corruption of any nation begins with that of a few individuals. If the collective conscience of that nation is alive, the pressure of public opinion keeps those persons in check and prevents the nation as a whole from becoming corrupted. But if instead of censuring such individuals, the nation leaves them free to behave corruptly, the corruption originally confined to a few continues to spread till it engulfs the whole nation. It was this which ultimately caused the degeneration of Israel. (For the curse against Israel in the words of David and Jesus see Psalms 10, 50 and Matthew 23.)

I am not discussing MARUF, I am talking of MUNKAR which has entered our society and slowly and slowly it becomes part of our society. Society has stopped them considering evil. These evils are destroying our society.

What are the major MUNKAR in our society?

1. Shirk (Associating others with Allah) – this is also not point of discussion today.
2. Riba – I have written about this in my previous posts.

TODAY’S PROBLEM IS, PHOTOGRAPHY, VIDEOGRAPHY AND MUSIC.

All these three has been forbidden in Islam but all these have become part and parcel of lives. Society has stopped considering it forbidden. (Haram) – Prohibited.
It is not permissible to make video recordings or produce pictures of animate objects where there is no dire need (eg; taking pictures for Passports, Visas etc). Picture making (of animate objects) is regarded to be a major sin in Islam.
Ibn 'Abbaas (may Allah be pleased with him and his father) reported that the Prophet (peace and blessings of Allah be upon him) said: "Every image-maker will be in the Fire, and for every image that he made a soul will be created for him, which will be punished in the Fire." Ibn 'Abbaas said: "If you must do that, make pictures of trees and other inanimate objects."

sahih Bukhari Vol 3, Book 34. Sales And Trade. Hadith 318.
Narrated By 'Aisha : (Mother of the faithful believers) I bought a cushion with pictures on it. When Allah's Apostle saw it, he kept standing at the door and did not enter the house. I noticed the sign of disgust on his face, so I said, "O Allah's Apostle! I repent to Allah and H is Apostle. (Please let me know) what sin I have done." Allah's Apostle said, "What about this cushion?" I replied, "I bought it for you to sit and recline on." Allah's Apostle said, "The painters (i.e. owners) of these pictures will be punished on the Day of Resurrection. It will be said to them, 'Put life in what you have created (i.e. painted).' " The Prophet added, "The angels do not enter a house where there are pictures."

Today there is phone with camera which can click anything all the time, it is just like evil in the hand. These pictures and video’s will take those who are clicking it to the fire of hell.
1. [It was narrated] from ‘Abd Allah ibn ‘Umar (Allah be pleased with him) [that] he said: Allah’s Messenger (Allah bless him and grant him peace) said, “Verily those who make these pictures will be punished on the Day of Resurrection. It will be said to them ‘Bring to life what you have created!’” Al-Bukhari transmitted it in Bab ‘Adhab al-Musawwirin, and Muslim in this chapter.
2. [It was narrated] from ‘Abd Allah ibn Mas‘ud (Allah be pleased with him) [that] he said: Allah’s Messenger (Allah bless him and grant him peace) said, “Verily, of the most grievously tormented people on the Day of Resurrection are picture-makers.” Al-Bukhari and Muslim transmitted it.
3. Abu Zur‘ah said: I entered the house of Marwan with Abu Hurayrah, and he saw pictures therein and said: I heard Allah’s Messenger (Allah bless him and grant him peace) say, “Allah (Great and Glorious is He) said, ‘And who is more unjust than one who set out to create a creation like My creation? Let them create an atom, let them create a grain, or let them create a barleycorn!’” Al-Bukhari transmitted it in Bab Naqd al-Suwar, and Muslim in this chapter.
4. The hadith of Abu Talha in this chapter: “Angels do not enter a house in which there is a dog or a picture.”
5. [It was narrated] from Abu Hurayrah (Allah be pleased with him) in marfu‘ form: “Angels do not enter a house in which there are sculptures or pictures.” Muslim transmitted it in this chapter.
MUSIC

Islam totally forbids adultery and also those things that lead to it. Allah Most High says:
“And do not come near to adultery, for it is a shameful deed and an evil, opening the road (to other evils)” (al-Isra, 32).
Islam does not only prohibit adultery and fornication, but also those things that may lead to it. This is the reason why the Qur’an orders Muslim men and Women to lower their gazes. It prohibits one from being alone with someone from the opposite sex (khalwa). Informal interaction with the opposite sex has also been made unlawful.
This is also one of the main reasons for the prohibition of music, as it effects one’s emotions, creates arousal, passion and excitement, and also leads to various physiological changes in the person. It is a psychological proven fact that two things are instrumental in arousing the human sexual desire, one being the voice of a female (for males) and the other music.
1) Allah Most High says:
“And there are among men, those that purchase idle tales, to mislead (men) from the path of Allah and throw ridicule. For such there will be a humiliating punishment” (Surah Luqman, V. 6).
The great Companion Abd Allah ibn Mas’ud (Allah be pleased with him) states in the explanation of the word “idle tales”:
“By Allah its meaning is music” (Sunan al-Bayhaqi, 1/223 & authenticated by al-Hakim in his Mustadrak, 2/411).
Imam Ibn Abi Shayba related with his own transmission that He (Ibn Mas’ud) said:
“I swear By Him besides whom there is no God that it refers to singing” (132/5).
The great Companion and exegete of the Qur’an, Abd Allah ibn Abbas (Allah be pleased with him) states:
“The meaning of the word is music, singing and the like” (Sunan al-Bayhaqi, 1/221& Musannaf Ibn abi Shayba, 132/5).
He also stated:
“Music and the purchase of female singers” (Musannaf Ibn Abi Shayba, 132/5).
Hasan al-Basri (Allah be pleased with him) said:
“This verse was revealed in relation to singing and musical instruments” (Tafsir ibn Kathir, 3/442)
The same explanation has also been narrated from Mujahid, Ikrima, Ibrahim Nakha’i, Mak’hul and others (Allah be pleased with them all).
(1) Hadhrat Abu Maalik Ash'ari says that he heard Rasulullah says:
"Most certainly, there will be in my Ummah people who will make lawful fornication, silk, liquor and musical instruments." (Bukhaari)

(2) In another version of this narration, Rasulullah said:
"Most certainly, people from my Ummah will consume liquor which they will describe with some other name. Over their heads will be playing musical instruments and singing girls. Allah will cause the earth to swallow them, and from among them He will transform into apes and pigs." (Ibn Maajah )

The punishment for music and singing is exceptionally severe. Some Juhhaal (ignoramuses) have attempted to escape the condemnation of music and singing stated in this Hadith by presenting a very stupid argument. They argue that the punishment mentioned in this Hadith applies to a collective act which consists of four deeds, viz., fornication, silk, liquor and music.
(3) Imraan Bin Husain narrates that Rasulullah said:
"In this Ummah will be earthquakes, disfiguration (of faces which will be transformed into apes and pigs) and showers of stone (descending on them from the heaven)." A man from among the Muslimeen said: "O Rasulullah ! When will this be?" Rasulullah said: "When singing girls and musical instruments will become profuse and when liquor will be consumed (in abundance)." (Tirmizi)

(4) Hadhrat Abu Hurairah narrated that Rasulullah said:
"During the last of ages (in close proximity to Qiyaamah) a nation from my Ummah will be disfigured (and transformed) into apes and pigs." The Sahaabah said: "O Rasulullah ! Will they be Muslim?" Rasulullah said: "Yes. They will be testifying that there is no deity but Allah and that I am His Rasool, and they will be fasting (in the month of Ramadhaan)." The Sahaabah asked: "O Rasulullah ! What will be their condition (to warrant such chastisement)?" Rasulullah said: "They will be indulging in musical instruments, singing girls, musical drums, and they will be consuming liquor. They will one night go to sleep after their liquor and amusement. When they arise in the morning, they will have been disfigured (and transformed into apes and pigs)." (Kaf-fur Ruaa’)

It is apparent from this Hadith that the musical drum (the Tablah of the Qawwaals) and similar other kinds of musical drums are not the duff mentioned in the Ahaadith. Musical drums have been declared Haraam unanimously by all authorities from the very age of the Sahaabah.
(3) Imraan Bin Husain narrates that Rasulullah said:
"In this Ummah will be earthquakes, disfiguration (of faces which will be transformed into apes and pigs) and showers of stone (descending on them from the heaven)." A man from among the Muslimeen said: "O Rasulullah ! When will this be?" Rasulullah said: "When singing girls and musical instruments will become profuse and when liquor will be consumed (in abundance)." (Tirmizi)

(4) Hadhrat Abu Hurairah narrated that Rasulullah said:
"During the last of ages (in close proximity to Qiyaamah) a nation from my Ummah will be disfigured (and transformed) into apes and pigs." The Sahaabah said: "O Rasulullah ! Will they be Muslim?" Rasulullah said: "Yes. They will be testifying that there is no deity but Allah and that I am His Rasool, and they will be fasting (in the month of Ramadhaan)." The Sahaabah asked: "O Rasulullah ! What will be their condition (to warrant such chastisement)?" Rasulullah said: "They will be indulging in musical instruments, singing girls, musical drums, and they will be consuming liquor. They will one night go to sleep after their liquor and amusement. When they arise in the morning, they will have been disfigured (and transformed into apes and pigs)." (Kaf-fur Ruaa’)

It is apparent from this Hadith that the musical drum (the Tablah of the Qawwaals) and similar other kinds of musical drums are not the duff mentioned in the Ahaadith. Musical drums have been declared Haraam unanimously by all authorities from the very age of the Sahaabah.