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Topic initiated on Thursday, September 9, 2004  -  3:42 PM Reply with quote
In what ways have I done wrong?

Assalaamu 'alaikum to all,
I have queries about certain doubts that I would like to find answers to clear my clouded mind. Pls advice.

I bought an insurance policy many years ago. I was told that as long as it is an endowment policy that does not cost one's death for the insurance the mature, it is considered halaal. Somehow after that, some people were saying that it is not really halaal if it is not an Islamic insurance which it wasn't bought from an Islamic company. Anyway, not realising that fact at that moment because I was very young and ignorant.

However, some years passed by and I took some bonuses from the insurance and even took some loan that incurred interest. Recently, I received emails saying that interest is riba and not halaal be it among muslims or the non-muslims. So my main question is:

1. Is insurance considered halaal? What type of insurance considered halaal?

2. How in this way should I consider the interest given from my insurance company and expected from the loans? Are the interest involved in this case is also considered as riba?

3. What about the bonuses or profits obtained from the insurance policy that is used to invest and generate cash flow from this insurance policy transantions?

4. What actually I have done wrong, I am not sure. So pls advice.

Thank you.
May Allaah Bless All Muslims.

Thank You.
May Allaah Bless All Muslims.

Posted - Friday, September 10, 2004  -  9:39 AM Reply with quote
waalaykum assalaam dear
n your query has been posted to our Accountants/Bankers/Economists' community @ Studying Islam
we look fwd to hearing from them and you r in our prayers

Communities@ Studying Islam

Edited by: StudyingIslamUK on Friday, September 10, 2004 9:39 AM

Posted - Wednesday, September 22, 2004  -  1:34 PM Reply with quote
assalamualaykum and sorry for the delay dear br,
Considering the delay to your reply please see the following from the collection of our academic material at www.monthly-renaissance.com.
Also have a look at the the March'03 special issue of renaissance on the mentioned site which is about

The Economic Directives of Islam



Question: I wish to know about the concept of Insurance in Islam? Are Muslims allowed to take an insurance policy? In this policy we pay an annual premium and of course after 10-20 years the policy expires and we receive our money with profit. Please explain this concept to me.

Answer: In its classical concept, insurance is a means of helping individuals who are afflicted with damage and loss. Therefore, in its essence, it is a philanthropic and humanitarian undertaking. As such its underlying spirit seems very noble.
Today, particularly due to the absence of a state system of security and insurance in most underdeveloped countries, there are a number of insurance companies in the private sector which are doing this job. Also, it is known that many of them are based on interest. However, buying an insurance policy cannot be regarded as forbidden since one is not taking interest in doing so. At best, in some cases, it can be regarded as furthering and promoting an evil, which according to the Qur’an (5:2) is ta’awun ‘ala al-ithm (co-operation with an evil), and which should be avoided as much as possible. So, a careful approach would be to benefit from insurance policies only if a person feels that it is necessary to do so in his circumstances. A person must decide for himself in this regard instead of asking some external authority – since it is only he who is the best judge of any genuine plea that he may have.

(Shehzad Saleem)


Edited by: hkhan on Thursday, September 23, 2004 9:15 AM

Posted - Friday, September 24, 2004  -  6:27 AM Reply with quote
These are my observations regarding insurance. I have myself been approached so many times by insurance agents for life/disability insurance. I had the opportunity to listen to a fatwa. It was stated in it that all such insurance are Haram except that insurance which is compulsorily covered by companies for its employees. Like my bank has provided me compulsory life and disability insurance. Other than such cases where you have the option of having yourself covered or not, it is Haram.
Good Day!

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