Prayer TimesInsurance is a service that allows for reducing financial losses or compensating for incurred damages. In the event of an insured incident, a contract is made between the policyholder and the insurance provider to cover the loss.
The policyholder pays a specific premium for this service. The amount is calculated based on the potential losses that may result from various risks. There are two main types of insurance systems in the world: commercial (conventional) and Islamic. In reality, the conventional insurance system does not comply with the principles of our religion. This is because it involves usury (riba), uncertainty in transactions, deception, gambling, and "playing with fate," all of which are prohibited in Shariah. For example, you pay 20,000 tenge to insure your car for a year. If your car is damaged during this period, you may receive 200,000 tenge in compensation from the insurer. This excess is considered usury.
"Playing with fate" refers to insurance companies exploiting people's fears and charging money for something uncertain. However, no one knows what will happen in a year except Allah. This is similar to a lottery or gambling.
In uncertain transactions, a person does not know what they will receive for the money they spend. For example, if 50 people each pay 20,000 tenge to an insurance company for their cars, a fund of 1 million tenge is collected. During the year, 2-3 cars might be involved in accidents and those individuals will be compensated by the company. But for the remaining 47 people, it is unclear what they paid for. Their money is not returned.
Allah the Almighty says: "O you who have believed, do not consume one another's wealth unjustly..." (An-Nisa, 29) and "O you who have believed, indeed, intoxicants, gambling, [sacrificing on] stone altars, and divining arrows are but defilement from the work of Satan, so avoid it that you may be successful." (Al-Ma'idah, 90).
A God-fearing person, if they receive compensation from an insurance company, should only use the amount they paid in premiums, and the rest should be spent on public needs such as building roads or bridges. For a Muslim, using mandatory insurance is considered a necessity.
The Islamic insurance system does not aim for commercial profit. It is considered a form of charity. For example, if you own a car, you pay an annual insurance premium of 20,000 tenge. If your car is damaged, the company compensates you as needed. Any remaining funds in the collective pool at the end of the year are returned to the contributors. The company charges only for safekeeping and managing the funds. The insurance company is not the owner of the fund, but acts as its organizer.
The Noble Qur'an says: "Help one another in righteousness and piety, but do not help one another in sin and transgression. And fear Allah; indeed, Allah is severe in penalty." (Al-Ma'idah, 2).
The Prophet (peace and blessings of Allah be upon him) said: "The believers, in their mutual kindness, compassion, and sympathy, are just like one body. When one of the limbs suffers, the whole body responds with wakefulness and fever." (Muslim).
Hasan AMANKUL
"Munara" newspaper, No. 30, 2020
This content was drafted with AI assistance and reviewed by an editor.