Have you ever been told Insurance is Haram?

[swill]

Have you been told Insurance is Haram?

Have you ever thought about what would happen to your family if an illness or disability made you unable to work?

Have you thought about insurance but were unsure about the Islamic Perspective?

This Saturday at 1pm Central Time. There will be a Livestream on youtube going over the Islamic Perspectives on Insurance. Potentially Halal Insurance products and more.

Hope to see you there.

 

[gregscott]

@swill There is Islamic finance and takaful in my country. Guess I'm good

 

[swill]

@gregscott Thats awesome. Inshallah we get that in Canada one day

 

[warmliketheeveningsun]

@swill No. Instead I’ve been heavily lectured on the benefits of insurance lol

 

[swill]

@warmliketheeveningsun Lol mashallah

 

[ddddkkkaj]

@swill Well mufti tariq masud said insurance is haram and every Aalima i have asked..

 

[swill]

@ddddkkkaj The scholars I've spoken to. Have said you can't make a blanket statement like that about all insurance but you have to look at each type individually to determine if it's halal or not.

Same with stocks, crypto and other things.

 

[mehrou12]

@swill Regardless of halal / haram, why do i need this insurance policy in Canada? Health care and education is free. Also, there is welfare and old age security setup by federal government. I don't see the point of having this insurance.

 

[annache]

@mehrou12 Heath is actually a type of insurance, you pay provincial insurance premiums. You will need insurance for drugs and dental, or else you pay the costs.

Actually insurance reduces gharar (risk of uncertainty of illness, fire, theft, accident etc.). But some scholars assert that insurance is like gambling so it is haram. This opinion is illogical - insurance reduces gharar and this is a good thing.

 

[b211fan]

@mehrou12 You do know international students and non-citizens pay for health insurance in Canada right?

 

[popsicles]

@swill If options trading in stocks is haram then insurance is also haram

 

[editheraven]

@popsicles How are you relating them? They are very different things.

Insurance is a group of people pooling some money so that if a need arises for a few of those people, they can use that money. It is a safety net in that many people help the few as needed. If everyone needs the money at the same time, there is no benefit, but that is rare. What does that have to do with borrowing shares and putting in price targets to make trades?

 

[natalie223]

@editheraven What you just described is takaful, insurance is different.

Insurance is gambling,
Insurance company knows the odds of you dying

Insurance company gives you the price x payment for payout y

Just like horse racing x payment wins you payout y
Just like betting on boxing x payment wins payout y

In both horses and boxing they know the odds and charge accordingly so they make a small profit . (If they get the maths wrong they go bust/not profitable)

Same with insurance you’re betting you will die before they think you will . X payment wins payout y if you’re right

If their right , we’ll they win your x payments

How is this like options , it’s gambling

 

[editheraven]

@natalie223 Nobody knows the future, that doesn’t mean it is gambling. Insurance companies use data they have collected and statisticians to estimate the likelihood of certain events. They set prices based on those likelihoods so that they don’t run out of money. Insurance companies are entities that need to survive in order to provide their services. It is true that many are profit-based which is not good for society, but I wouldn’t call it gambling. Just like any other business, there is risk involved.

 

[natalie223]

@editheraven I actually agree with everything you said

gambling is not about knowing the future.

I don’t know where you got the link from that not knowing the future = gambling
I haven’t stated anything regarding knowing/ not knowing the future

Gambling is defined as :
A hope of gain, of an uncertain event whose result may be determined by chance or by reason of the bettor's miscalculation.

Nothing to do with knowing the future, if they did know the future . Then this would not be gambling . It would be illegal , insider trading , fraud etc

Yes insurance is just like any other business, that’s not the point That I am arguing .

There are many other legitimate business using your points. Here’s an example

The casino is also just like any other business. They fit exactly your points regarding a legitimate business

The casino have statisticians and estimated likelihood of certain events ,
The casino have set prices so they don’t run out of money .
The casino is just another profit based business providing services .
With your understanding, the casino is also like any other business.

My point is , the people who use the casino are gambling. The casino itself is a legitimate business

My point is , the people who get phone insurance are gambling. The phone insurance company is a legitimate business and neither party knows the future.

One party (you) are gambling you will loose or break your phone, betting your monthly payments will be worth the insurance payout

The other party (insurance) are betting your monthly payments are profitable compared to the average likelihood of payout.

 

[swill]

@natalie223 Respectfully brother, I disagree with your view here.

Insurance is less about putting money in hopes of a payout. It's more about minimizing loss due to calamity.

If you die unexpectedly, if your house burns down, if you get hurt and can't provide for your family. These losses are substantial and can ruin people's lives.

If done correctly you don't profit from Insurance. It prevents loss.

Similar concepts existed during the Prophets time for paying blood money or to prevent losses for merchants.

Insurance is conceptually no different.

 

[natalie223]

@swill Thanks for the good insights, it’s great to hear and have a respectful discussion from opposing views.
I appreciated it