Insurance: is it haram or halal?
“That is because God is the patron of those who have faith, and the unbelievers have no patron”
We trust you are spending the finest time of life but isn’t it without insurance somewhere, but by Will may be. Let’s have a brief first about insurance game plans. There are two kinds of life insurance. One is best understood as simply another instance of the standard protective insurance, while the other is best characterized as an investment vehicle.
Types of life insurance
There are many permutations and variable types of life policies, but fundamentally they all fall into one of the two areas below.
Term insurance is protective insurance that pays out to your dependents in case you die within a certain period. So, let’s say you are 25 and you purchase a policy costing £10 a month which promises to pay out your dependents £100,000 in case you die before the age of 50. Now what happens is:
a) Either you die before the age of 50 and your family gets £100,000.
b) You survive past 50 and the policy simply ends. The insurance company simply keeps the £3000 you’ve paid in until then – just like the insurer keeps your car insurance premium each year.
Whole life insurance
Whole life insurance is a mixture of protective insurance and investment vehicle. Again, let’s say you take out a policy at the age of 25 for £100 a month and it is set to pay out a minimum of £35,000 at the age of 50. If you die before the age of 50 then it pays out £35,000 to your dependents. But you would hope that you don’t die and the underlying investments do well and you get paid out £50,000+ by the time you’re 50.
While you’re here and thinking about planning your finances after you pass away for your loved ones, you should also think about sorting out your Islamic will. On average people misplace assets or lose through tax inefficiency up to £9700 when they die without a will. On top of that as a Muslim having a will is super important so that your inheritance is separated up the Islamic way.
The Islamic perspective: Term life insurance
This kind of insurance is very much equivalent to all the other kinds of protective insurance that were discussed in the previous article. The same arguments apply, namely:
- The kind of gharar that is being forbidden in the ahadith is not the kind of gharar involved in modern insurance;
- The many positives of insurance outweigh the negatives; and
- if we accept takaful as Shariah-compliant, then we must accept conventional insurance as Shariah-compliant as there is little substantive difference between the two.
There may however be a few unique objections to life insurance in particular that cannot be leveled against other kinds of insurance, so let’s test if they’re compelling.
ARGUMENTS AGAINST LIFE INSURANCE IN PARTICULAR
The first one is that, unlike other kinds of insurance, life insurance seeks to insure against loss of life and the sustenance of one’s family after one’s death.
The scriptures say:
When Ibrahim said: My Lord is He who gives life and causes to die [2:258]
He is the friend and caretaker of the faithful, not only in this world, but also in the next, as He says: “We are your friends in this world’s life and in the next world” [41:31].
In the story of Joseph, He quotes his words, “Thou art my friend in this world and the next” [12:101].
Again at place, he says, And He is the one who gave you life; then He causes you to die and then will [again] give you life. [22:66]
There is not a single moving creature on the earth but Allah is responsible for providing its sustenance. [6:11]
Do not kill your children for fear of poverty. We will give sustenance to all of you. To kill them is certainly a great sin. [17:31]
“Umar said, “I heard the Messenger of Allah, may Allah bless him and grant him peace, say, ‘If you were to rely on Allah as He should be relied on, He would provide for you as He provides for the birds. They go out early in the morning hungry and return in the evening full.’” [Tirmidhi]
The argument goes that by taking out life insurance one is encroaching on the domain of Allah. Allah has specifically mentioned life and sustenance as two categories we shouldn’t worry about – that is in the hands of Allah.
There are two obvious responses to it: (1) Allah says He is in charge of life and death and providing sustenance, but he doesn’t want us all to kick back and chill out, or take no precautions whatsoever.
Anas ibn Malik reported: A man from the Ansar came to the Prophet, peace and blessings be upon him, and begged from him. The Prophet said, “Have you nothing in your house?” The man said, “Yes, a piece of cloth, a part of which we wear and a part of which we spread on the ground, and a wooden bowl from which we drink water.” The Prophet said, “Bring them to me.” The man brought these articles to him and the Prophet took them in his hands and he said, “Who will buy these?” Someone said, “I will buy them for one coin.” The Prophet said twice or thrice, “Who will offer more than one coin?” Someone said, “I will buy them for two coins.” He sold them for two coins and the Prophet said, “Buy food with one of them and give it to your family. Buy an axe and bring it to me.” The man brought it to him. The Prophet fixed a handle on it with his own hands and he said, “Go gather firewood and sell it, and do not let me see you for a fortnight.” The man went away and gathered firewood and sold it. When he had earned ten coins, he came and bought a garment and food. The Prophet said, “This is better for you than for begging to come as a blemish on your face on the Day of Resurrection. Begging is appropriate only for three people: one in severe poverty, one in severe debt, and one who must pay a difficult compensation.” [Abu Dawud]
The Prophet also said, “It is the duty of a Muslim who has anything to bequest not to let two nights pass without writing a will about it” (Sahih al-Bukhari). Again, Islam teaches us to take all necessary precautions for looking after our family even after we die. In fact, Islam forbids one from bequeathing more than 1/3 of the inheritance to other than the set people who are the deceased’s, immediate family.
Argument (2) against this objection is that by the same token all the other kinds of protective insurance would also be impermissible as Allah is also the SHAFI “Healer” and HAAFIZ “Protector”. So, one shouldn’t take out medical insurance – in fact, by the same reasoning, one shouldn’t go to the hospital or take medicine.
Another objection to the permissibility of life insurance could be that Allah is the owner of life and death – and as such we are not Islamically permitted to trade using it. Again, there are two straightforward responses: (1) in life insurance we are not buying and selling our lives, we are mitigating the risk of loss of life; and, if I’m wrong about (1), (2) Allah says in the Qur’an:
“Indeed, Allah has purchased from the believers their lives and their properties [in exchange] for that they will have Paradise.” [9:111]
Insurance is not permissible: Following Reasons Upon which Companies manipulate you
- Qimaar (gambling): The Life Insurance Company might receive more than the insured monies or might not receive any amount of money. This is the same as gambling. If the insured person is afflicted with any loss or damage to insured properties worth millions, he might receive more than what he has paid for or might receive less. This is exactly how gambling works.
- Riba (Interest): If the Insurance Company receives premiums worth more than the insured amount, then that will be usury and interest. If there is any loss to the insured person’s property and the loss is worth much lesser than the total premiums that he has paid to the insurance company, such a person would be guilty of undertaking a usurious and interest-based transaction.
- Gharar (Future Uncertainty): There is no certainty when the insured person will die. Therefore, the insurance contract is based on an uncertain future event, i.e. death of the insured person. Rasullullah (Sallallahu Alayhi Sallam) prohibited any transaction which has the element of Gharar.
THE ISLAMIC PERSPECTIVE: WHOLE LIFE INSURANCE
Fundamentally there is not a problem with whole life insurance – but in reality, there will be for most people living in the West. This is because this type of insurance is best characterized as an investment and the permissibility of the investment depends on the underlying assets which are invested in.
In the Middle East, this is not a problem if you opt to go with a takaful operator who will be restricted by their internal policies to invest only in halal assets.
In the UK however it is a bit trickier as standard insurers will almost certainly put large amounts of the policy amount into fixed-income (interest-based) products.
But all may not yet be lost. There are potentially two ways to go about dealing with this: (1) either one gets a policy where one can dictate what underlying investments the policy is invested in (and then opt for all Shariah-compliant assets; or (2) one chooses a policy where the underlying assets are largely Shariah-compliant, and then gives away as a charity the portion that is not. I am not a huge fan of this latter option as whole life insurance certainly isn’t as necessary as a pension, say, can be. So, one can quite easily just choose to invest in the whole range of other Shariah-compliant investment products available instead.
I think the above arguments are fairly clear so I won’t repeat myself here. In short, if you are considering life insurance, see if it is term insurance or whole life insurance. If term insurance, my view is that it is fine. If whole life insurance, my view is that it is also fine if you can control the investments being sharia-compliant. In practice that is likely to be difficult in the West.
Insurance is defined as “A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured.”
A Managerial Game Story of Insurance Companies with World; How they tap you while Selling Policy at Table with you.
They are actually buying their stocks and shares in exchange for selling you a policy “company’s forefront product”. They meet their losses by your per annum fees. They re-invest and re-iterate your money for their self-purposes and profits. They return you only increased currency value, not profits. You are actually taking the same amount back after years that you paid in installments, keeping yourself bounded and locked, and that termed profit is only the value of currency increased by time in the financial market, so zero profit to you. They bounded your amount for years which you can by-self re-invest and take profits out of it. They want to make this whole world insured and rule over you only by showing you your satisfactions and safeties with the misconduct of psychological manipulations. Reality is different. Think!
It is all designed primarily as a training device for middle-management and higher executive levels, but it is also capable of refinement into a detailed tool for planning and budgeting and of expansion to all types of insurance and essential data needed for actually setting up the company’s own game.
Aware of this potential, numerous economic players have invested in this medium. The insurance theme, being universal, has been naturally boosted in this recreational universe. Tapping you into gaming by the insurance business is just starting as it now turns towards augmented reality and virtual reality.
Insurance and advert gaming
What is Advert Game? An advert game is a game that includes advert references designed to promote a given brand. This kind of medium, based on entertainment, makes it possible to capture prospects by means other than traditional media. They sit with you with completely manipulated games around you through media warfare. Let’s have a game scenario.
Advert gaming showcases notes several advantages to them. Have them what advert gaming do.
- It increases brand exposure time by several dozen minutes,
- It makes consumers active, putting in place gradual commitment mechanisms whereby networking is carried out directly by means of dialogue boxes like in a video game,
- It may establish a direct communication channel with consumers, enabling them to share their opinion about the brand.
In this category of game, the ‘Trivial’ rank high. Convivial Assurance Gan published in 2002 by French insurer GAN, stands as its perfect representative. The game, involving no more than six partners, is more particularly designed for professionals. It comprises 330 questions/answer cards on the subjects of History/Geography, Legal/Insurance, General background knowledge, Economy, and Insurance.
As in every trivial worthy of respect, the player is provided with a collector that fills in with every good answer given. The topic of the questions depends on the color of the space where the player’s pawn is located. The first player has filled his or her collector is the winner of the game.
Players keen on immersive experiences will have to resort to Insure!. This board game propels players at the top of an American surety insurance company struggling with the hazards of the local and federal economic policies.
The players would be seeking municipal bonds in order to snatch juicy insurance contracts. Issuers, with risky profiles, pay more premiums but remain further susceptible to be defaulting, thus compelling players to put their hands in their pockets. Each player’s cash flow evolves as macro-economic events unfold, the latter being randomly picked from a pack of cards. The issuers’ risk profile is determined based on the same principle by means of dice throwing.
Insure! is edited by AMBAC a leading player on the markets of municipal bonds in the United States. The game has thus this particularity to place players directly right in the middle of the brand’s profession.
Online games are also another category sought after by advert gaming. The Longevity Game, available on the website of American insurer Northwest Mutual, has been under the spotlight of mainstream media as of 2007. Under the cover of a small flash application, the insurer has tackled the topic of life expectancy, estimated according to the history and life choices of internet users.
Sonpo24, a subsidiary of Japanese giant Sompo, specialized in motor insurance, allied in 2008 with editor IDAC to produce Hana Koala Escape, an escape game, free of charge and designed in flash for PC computers.
Escape game is a particular kind whereby players find themselves confined in a room and faced with a number of puzzles that they have to resolve in order to find their way out. In Hana Koala Escape, players wake up to find themselves locked in a room after losing their way in a car on a stormy day.
The mechanics of Escape Game works well because the room where the character evolves displays an assisting device both minimal and adequate for the experience. The confidential setting and the mystery associated with the situation can only increase the addictive power of the game.
Just like movies, reference to the brand is meticulously placed. Advertising messages may appear when electronic equipment of the house is turned on for example.
American insurer Progressive has followed in the footsteps of other players on the market with numerous games that can be played directly in the web navigator. This is how games such as Operation Discounts!, Troubling Times in the Kingdown, and Superstore Shuffle were issued in the 2010s where the insurer exhibits his famous Flo mascot on stage.
Due to their platform configuration, applications store on cellular phones are for insurers an additional relay to launch production. American motor insurer GEICO, in the middle of a commercial faceoff with Progressive, gets the edge in 2012 with the driving game GEICO Tricky Traffic.
European groups have also been in the race, with French insurer AXA innovating in 2011 with its three-dimensional game Pass It On!. In order to raise awareness of customers about domestic accidents, the MMA insurance group issued in 2014 La Famille Zerodégat Damage-free Household), a replica of the famous advert slogan “Zéro tracas, zero blabla” (No worry, no fury).
Advert gaming is also found in software platforms where brand products may be integrated as additional content.
The most astounding example in this regard is the partnership brokered in 2010 between Farmers Insurance and Zynga, developer of the simulation game of agricultural insurance Farmville. The agreement enables American insurers to sell through the game agricultural insurance in order to protect the crops of the players.
Still, in search of new aids, Progressive Insurance would come up with an add-on of this category in 2012 for the life simulator Sims Social on Facebook, followed in 2013 by an extension for the famous city-builder SimCity.
Generally, social networks are an interesting base for advert games as they are adapted to short sessions and as they have a viral effect within circles of friends. That is how several productions have seen the light of day during the 2010s (Route-Rageous, Lock-a-door, etc.). Today, media are attracting new simple experiences such as the ones requiring minimum knowledge (quiz, contest games, etc.)
Their mind games integrate classical gameplay mechanics whereby entertainment does not stand as a major goal. These products, oftentimes meticulously made, are designed for teaching or informational purposes.
In the insurance field, they are aimed at the training of corporate staff who can be either in-house collaborators or external elements in case the product is proposed as a service.
AXA Group’s Esprit de Service (Service spirit) stands as a good example for training to the satisfaction of customers. The serious games, issued in-house in 2014, proposes to players 40 situations drawing inspiration from real life. Collaborators train teams, leave some clues, and communicate in order to resolve each situation. Esprit de Service accounts for 5000 learners for 15000 hours of training.
Furthermore, serious games have proved to be particularly adapted to the development of soft skills. Swiss group La Baloise proposes in this regard cooperation game Sarah’s Vision.
Sarah’s Vision freezes a universe of science fiction whereby the role of the insurer is no longer that of a claim manager but rather that of a highly specialized prevention and security company. Collaborators impersonate the role of special agents tasked to ensure the protection of important personalities.
At First and At Last, Known Reality is;
Allah increases the provision (rizq) for whom He wills, and straitens (it from whom He wills), and they rejoice in the life of the world, whereas the life of this world as compared with the hereafter is but a brief passing enjoyment
Clearly, we do have a degree of ownership over our lives and what we do with it. To that extent, we are allowed to use our lives and bodies in the way we choose to. Be sensible in decisions, you are your standing decision today.