Shariah Position About Misconception of the Concept of Insurance

Insurance misconception among Muslim Ummah emanates from the religious doctrine of Tawwakkul (Trust on Allah (SWT) about fate). Muslim population believes that the insured puts a trust on the insurance company to protect him against an unexpected loss instead of putting  his  trust  on  Almighty  Allah  (SWT)  (Billah,  undated  (e)).  

Shariah Position About Misconception of the Concept of Insurance

Misunderstanding  the concept of fate (as associated with insurance) has made Muslim’s beliefs to deviate further by the belief that the future is   in the hand of Allah (SWT) where Muslim are faced with fatalistic mentality by putting themselves in the doctrine whether one is rich or poor, happy or sad, it is predestined by Allah (SWT) which is in line with the saying of noble Qur’an that  goes…but on Allah (SWT) puts your trust (Tawakkul) if you have faith (Qur’an; 5:26) (yusif, Radan, Ismail & Yakub, 2011).

This is a good dealing with luck. In fact; efforts and prayer should precede this kind of belief. Thus, for a long time, the misconception has been associated with insurance and as a result any  effort  to  decide  on  risk  management  strategy  to  insure  the  asset  or  life  has  been considered against the fate or will of Allah (SWT) (Iqtisad Al-Islamy, 2003 in Akhtev, Akhtar & Jafri, undated; yusif, Radan, Ismail & Yakub, 2011 and Kalif, 2006).

Of course, it is true that only Allah (SWT) knows one’s future and fate, but it is reiterated that Muslim should strive to achieve the goodness in this world and the hereafter (Qur’an; 2:201). Submission to the will of Allah (SWT) has a positive effect on human behavior for it will lead to peace and contentment. 

Undoubtedly one has to submit every single thing to Allah (SWT) but is supposed to be after his hand stretch out to do the best effort as he can, to change himself, so that he would be able to manage and to cope with unforeseen calamities and misfortune (Akhter, etal, undated). In his tradition, the Holy Prophet (SAW) was reported to have asked a Bedioun who had left his camel untied, “Why do you not tie your camel? The Bedouin answered; “I put my trust in Allah (SWT)”, the Prophet (SAW) then said; “tie up your  camel  first,  then  put  your  trust  in  Allah  (SWT)”  (Sunan  Al-Tirmizi  vol.  4,  No 2517:668). The story of Prophet Ya’qub in the noble Qur’an shows similar dimension as it says; “further he said; O my sons! Enter not all but one gate. 

Enter ye by different gates. Not that I can profit you ought against Allah (SWT) with my advice. None can command except Allah (SWT): on Him do I put my trust; and let all that trust put their trust on him”. (Qur’an;12:67). We Muslim, however, should put our trust on to Allah only after meticulous planning by best utilization of all the available resources like Takaful products. 

Various  sources  of misconceptions  explored  by scholars (Isa  & Dandago,  2010;  Billah, undated (e) and Kalif, 2006) among others are; that all insurance is a form of a gambling; that all dimension of insurance seek to maximize profit which takes the benefits away from the policy holders or participants; that all Takaful operators are the same; that it is safer to say “I do not need Takaful (insurance) and finally, Takaful is contrary to the principles of Mirath and Wasiyah especially in the case of family Takaful plan.

Therefore, in response to the misconception, many Qur’anic injunctions and Sunnah have already clarified some issues. Besides, an Islamic model of insurance is a mutual agreement and transaction similar to the Allah (SWT) saying: “o ye who believe! Do not misappropriate your property among yourselves in vanities but let there be among you traffic and trade by mutual goodwill! (Qur’an; 4:29) Takaful plan encourages Muslim Ummah to strive hard in overcoming difficulties in their lives where the Holy Prophet (SAW) have said to that effect: as narrated by Abu Huraira (R.A), the Holy Prophet (SAW) said; “whosoever removes a worldly grief from a mu’min, Allah (SWT) will take away from him one of the grieves of the hereafter. 

Whosoever alleviates a needy person, Allah (SWT) will alleviate from him in both the world and the hereafter” (Sahih Muslim in a Nawawi: 114).  Takaful is also similar to the principle of al-wadiyah (deposit) whereby two parties engage themselves in an agreement in which one of them deposits money to the other as a trust or Amanat for the purpose of safe keeping as Allah (SWA) says, “...verily Allah (SWT) commands you to render back trust to those to whom they are due… (Qur’an; 4:58).

In conclusion, however, Takaful is aimed at eliminating hardship from one’s life which is in line with the Allah (SWT) saying,”...Allah (SWT) intends easy life for you while He does not want to put you to difficulties… (Qur’an; 2:185). In the same vein, the Holy Prophet (SAW) said as narrated by Safwan Ibn Salim (R.A); the Holy Prophet (SAW) said: “the one who looks after and works for a widow and for a poor person is like a warrior fighting for the cause of Allah (SWT) or like a person who fast during the day and prays overnight… (Sahih al-Bukhari, vol 8, No 35:23). 

The Holy Prophet (SAW) finally does advice as narrated by Sa’ad Ibn Abi Waqqas (R.A) that “it is better for you to leave your offspring wealthy than to leave them poor asking others for help…” (Sahih al-Bukhari vol. 8, No. 725: 477)

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