Lets look at the academic side of the post Insurance is giving our family and friends a wrong message. In my understanding the insurance system (and the remainder of how capitalism works) is serving the wrong people in the long run. According to my understanding of islamic principles we should be relying on the social fabric that we live in for support at such times instead of paying a third party that runs ‘only for profit’ to help us in rainy days.
The payments (or premiums) of the many pay for the losses of a few. Your premiums go into a large pool, if you will, at
your insurance company. The claims of the few are paid from that pool. IBC
If this is what insurance is, then there are two aspects to think about –
- Do some people get charged less premium than others? Do some people claim more than others? See in the capitalist society that this serves the right thing to do is to maximize! So it is only natural for people to find ways to pay less but claim more. And I know people do that. And most of us naive ones pay for their gains.
- The other thing worth considering is that if there is a massive disaster, these organizations that we trust will go bankrupt with all our premium.
- There are also very high rates of people who start paying but do not complete the minimum payments for life insurance and have their policies redundant.
- Many heirs don’t know that there is a policy in their favour. They often go uncollected!
Instead, if we were to inculcate a culture of support within our close society we will be investing with people who will genuinely care for our well-being. If there is a major catastrophe they might actually support in financial / non-financial ways that could go a much longer way than any insurance company can ever do.
Muslim min Imaraat 