QUESTION:
I live in Europe (Holland), I
ANSWER:
Conventional insurance runs on two fundamental elements i.e. interest and gambling. It is for this reason that the Ulama have regarded it as Haraam.
One cannot deny the benefit nor the need for insurance. Therefore contemporary jurists have researched and mentioned permissible insurance plans and are called Takaaful and mutual insurance. Some of these permissible insurance plans are available certain countries.
If a person is in need of insurance then he should seek permissible insurance. If there is no permissible insurance available and it is a non-Muslim country then due to the need/necessity Ulama have given permissibility in certain matters with non-Muslim companies in order to save oneself from sudden/unforeseen misfortune. For example medical aid and short term insurance. At the time of taking out insurance, ones niyyat(intention) should be that if any calamity befalls him then he will take benefit from the insurance but if the benefit exceeds the amount that was paid in, then he will either repay the insurance company in instalments or give that amount In charity.
In the event of no calamity befalling him and the company is willing to pay him, then he should only take the amount equivalent to which he paid in and he should not seek in excess of this amount(that he paid in). he should pass this information to his relatives and he can also make wasiyyat(bequest) of this.
The aim of those that are involved in gambling and interest is solely to gain wealth(make money). If at the time of taking out insurance ones intention/aim is solely to make money, then this will not be permissible.
And Allah Ta’aala knows best
Mufti Muhammed Ashraf
19 JULY 2010 / 7 SHA’BAAN 1431