Life Insurance in islam
ABSTRACT
The focus of this post is on the insurance roles that are transforming today's to islamic insurance law. The Post discussed below are insurance history, law and fatwa, insurance to be mutual help orientation. This post will provide some theories of some scholars.
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| Insurance in Islam |
WHAT IS LIFE INSURANCE?
Insurance is an agreement between two parties. In the insurance system, the first party is required to pay the premium, and you can pay the premium each month, year or even just one time payment, it will depends on the contract agreement. Whereas the second party is obliged to give full guarantee to the first party if something bad happens to the participant or the insured object.
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The history of insurance begins through the field of trade between Babylonian traders and Chinese. The type of insurance they used at that time was specific to their products. Which guarantee is given is the risk of protection of goods lost in the middle of the sea or robbed. The insurance in pre-Christian history was recorded in a document called the Hammurabi Code in 1750 BC. The document explains the method of insurance guarantee for the first time for their products. At that time, the guarantor of the goods was still handed over to the notary public.
During ancient times began to evolve, types of insurance were increasingly developed by Roman and Greek aristocrats. Among these are health and life insurance. This initiation was held from 600 BC. Which concept is in the form of compensation to family members if someone dies. For example, compensation in the form of funeral expenses.
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A history of modern insurance
modern insurance began to develop in Italy with the appearance of the first insurance policy on this type of maritime insurance. At that time it had begun to enter the era of explorers to explore various parts of the world. and the ship was high-risk transportation. then they made insurance policy. where traders pay a sum of money to a party and if there is damage to the goods or lost during the trip, the party reimburses all losses. because insurance is considered beneficial for both parties, people enter into broad insurance agreements.
Pedro de Santarém was the first to print literacy on insurance issues in 1552. This record was further developed until the end of the Rennaissance in Europe. The history of insurance and its types has also developed with a more sophisticated system.
after a major fire in the city of London which burned nearly 13,000 residential homes and 100 churches in 1666m, that made English have fire insurance, and in the 18th century, fire insurance emerged in America, Germany, and France. then in the 19th- century insurance began to enter the Islamic state. Ibnu Abidin, Islamic scholars who have Hanafi schools/ Hanafi mazhab rest in peace in 1836M. he has stated that saukarah (insurance) is haram, he said, "this is an important discussion about the saukarah paid by the merchant in return for collateral provided by the pagan harbi".
had become a tradition among traders at that time when they rented ship for their goods that the ship belongs to a kafir harbi, they paid rent and also paid a sum of money to kafir harbi in his country. this payment is called saukarah if an accident occurs and commercial items on the ship catch fire, sink or are robbed. then the kafir harbi gives a guarantee (replacing the goods) in return for the saukarah he receives.
The kafir harbi has agents in the land of Islam, located on the coast. the agent receives saukarah from traders. their residence permit was approved by the sultan. in the event of an accident at the merchant's goods, the agent will provide compensation. in my opinion, the trader is not lawful to take compensation, because this includes responsibility for something that he should not be responsible for.
after that began to appear various types of insurance. starting from fire insurance, life, health, education, war hazards, third party insurance and so on, that could covers all aspects of life.
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What is kafir harbi
The kafir harbi are citizens and countries that do not have an agreement with Daulah Islamiyah. The country is called ad-dawlah al-kafirah ál-hárbiyah (harbi infidels who are fighting Muslims). This country is divided into two parts.
First, if the country is at war with Muslims, it is called ad-dawlah al-kafirah al-harbiyah al-muhâribah bi al-fi'li (harbi infidels who are really fighting Muslims for real). Secondly, if a kafir state is not in a real war with Muslims, it is categorized as ad-daw! Ah al-kafirah alharbiyah ghayru al-muharibah bi al-fi'li (harbi kafir state which is not in a real war with Muslims)
The legal difference between the two countries is, if a pagan country falls into the first category, which is actually fighting with Muslims, then the principle of interaction is the interaction of war, there must be no agreements with pagan countries like this, for example, political agreements (such as diplomatic relations), economic agreements (such as export-import), and so on. The agreement can only exist after there is peace (ash- shulh). His citizens are not granted permission to enter the Khilafah state unless he comes to hear kalamullah (studying Islam) or to become a dzimmi in the auspices of the Khilafah state. If the citizens of this pagan country continue to enter the Khilafah state, not to hear kalamullah, nor to become a dzimmi, then his soul and property are lawful, that is, he may be killed, or made prisoner, and his wealth may be taken. Conversely, if it falls into the second category, which is not at war with Muslims.
then the Khilafah state may enter into agreements with a pagan state like this; for example, trade agreements, good neighbor agreements, etc. Its citizens are given permission to enter the Khilafah to trade, recreation, seek treatment, study, and so on. His soul and property are not lawful for Muslims. However, if the citizen enters illegally, that is without the permission of the Khilafah state, then the law is the same as citizens who are at war with Muslims, namely halal souls and property If the citizen enters with state permission, he cannot stay in the Khilafah except for a certain period of time, which is under one year (An-Nabhani, 1994: 233).
Insurance in islam
since the advent of insurance, it has been forbidden by many scholars both individuals and institutions.
in 1978, in conference I al majma 'al fiqh al islamic in Mecca it was decided that insurance of all kinds was illicit, the decision reads "after conducting in-depth study and discussing, the majlis al majma' decided based on the most votes that conventional insurance with all the form is haram.
1985 the world's Islamic scholars who were under the OIC in the second conference in Jeddah agreed to issue a decision no.9 (9/2) 1985, which reads, "insurance transactions with certain premiums organized by insurance companies are transactions with a high gharar rates (uncertainty), therefore this transaction is forbidden by Islam.
in 2006 the AAOIFI also reaffirmed the prohibition of insurance in article (26)
concerning "at ta'min al islami, paragraph 2, which reads," the conventional insurance law according to sharia is haram"
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Insurance Haram in islam
1. In an insurance policy there is an element of gambling, uncertainty.
if the insured party only pays the first premium and the insured loss occurs, the insured party gets the money from the insurer much more than he pays. then the insured party is the lucky one to get more money and the insurer will lose some money.
and if the premium has been paid in full until the time specified in the agreement and there is no loss to the insured party, the insured party will suffer losses and the insurer will be lucky to get more money.
this is the nature of gambling if one party is lucky then the other party will lose money. Allah has forbidden gambling in his word.
O you who have believed, indeed, intoxicants, gambling, [sacrificing on] stone alters [to other than Allah ], and divining arrows are but defilement from the work of Satan, so avoid it that you may be successful (Al maidah:90)
This form is forbidden because the form of gambling which has a bet is only allowed on three games as mentioned in the hadith of Abu Hurairah, Rasulullah sallallaahu 'alayhi wa sallam said,
There are no bets in the race except in archery, camel racing and horse racing "(HR. Tirmidhi no. 1700, An Nasai no. 3585, Abu Daud no. 2574, Ibn Majah no. 2878).
Insurance contracts also contain high uncertainty. the insured party at the time of the contract does not know how much money will have to be paid, because when the first loss occurs, the contract immediately ends and the insured party receives compensation. and if a loss occurs, the insured continues to pay the premium until the agreed time.
At the time of the contract, the guarantor also does not know exactly how much money he will give if there is an insured risk. it could be that the insurer gives as agreed in the agreement and it also may not give anything to the insured party if the risk does not occur.
the prophet peace be upon him forbade the exchange that contains gharar. Narrated from abu hurairah that the Prophet forbade the sale and purchase of gharar (HR. Bukhori, Muslim)
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There is an exception
if health insurance is made directly by the treatment provider, then the law is allowed by the Shari'a with the technical requirements that must be considered so that gharar can be reduced to a minimum. the less gharar and the gharar covenant that many people need and are very compelling then that can be forgiven. like health insurance in order to save someone's life. (majma' al fish al islami.OKI, in the 16th congress in the Arabic emirate in 2005).
some point of Insurance
1. making detailed and clear agreements on the rights and obligations of both parties.
2. first, check the health condition of the insured, so that you can estimate the type of treatment and costs to be covered by insurance.
Understanding from the above decision it can be understood that this international fiqh institution permits health insurance on the basis that gharar in some conditions is permissible. including if the level of uncertainty is low and if the contract is deemed urgent, and these two factors are in the health insurance issued by the hospital.
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Shariah Insurance
when the scholars forbid insurance based on the arguments of the Al-Quran and the Sunnah, then they formulated a replacement that is free from gharar, qimar, usury and from the business side is more beneficial to both parties. this is considering that insurance is a human need in the modern age so that their lives are more peaceful to face risks tomorrow.
The Islamic Fiqh Council also decided unanimously to approve the resolution No. 51 adopted by the Senior Scholars' Council in Saudi Arabia on 4 Rabi Al-Aakhir 1397H on the permissibility of the cooperative insurance instead of the prohibited commercial insurance for the following evidence:
First: The cooperative insurance comes under the contracts of donation with the purpose of cooperation to face the dangers and shoulder the responsibilities at the time of disasters and tragedies. Such cooperative insurance happens through the contribution of individuals with cash amounts allocated to compensate those who are inflicted with damage and loss. The purpose of such a cooperative insurance group is not to get any commercial profit from others' money. Their intention is only to divide the risks among themselves and cooperate on bearing the damages,
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Second: The cooperative insurance is free from both kinds of usury (usury of
unequal exchange and usury of delayed payment). The contracts of shareholders in the cooperative insurance group should not be usury-based and they would not utilize the accumulated installments in the usury-based deals.
Third: Ignorance of the shareholders in the cooperative insurance group would not harm them, because they are donors so there is no question of risk, uncertainty, and gambling, while the commercial insurance is a contract of the commercial and financial transaction.
Al Majma' Al-Fiqhi Al-Islami of OKI propose
in lieu of forbidden commercial insurance namely ta'min ta'awuni (sharia insurance) which is built on the basis of grants and mutual help. AAOIFI also issued general guidelines on sharia insurance, in 2006, concerning ta'min al Islam.
The term at-ta'min is taken from the word amana which means to give protection, calmness, security, and free from fear.
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The term At-ta'min also means a person pays or hands over installments so that he or his heirs get an agreed amount of money, or to get compensation for lost property
The term takaful comes from the word takafala - yatakafalu, which etymologically means guaranteeing or bearing one another. Takaful in the sense of muamalah is to take risks from each other so that one another becomes a guarantor for other risks. Mutual risk is carried out on the basis of helping each other in the good by means of each issuing tabarru funds, funds for worship, donations, charity shown to bear the risk.
At-ta'min at-ta'awuni or insurance please help is "the agreement of a number of people to pay a sum of money in compensation when one of them gets a disaster", At- ta'min bi qist sickle or insurance with fixed shares is "A contract that requires a person to pay an amount of money to the insurance party consisting of several shareholders with an agreement if the insurance participant gets into an accident, he is compensated.
from the fatwa of the scholars, it can be understood that Islamic insurance is protected from the prohibited elements of muamalat/transactions.
As for riba bai 'contained in conventional insurance is not found in Islamic insurance, because Islamic insurance is not a bai contract' (buying and selling), but a grant agreement (donation) which aims to help each other and alleviate the burden of members affected by risk in the insured and not aiming for profit among customers or insurance companies.
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There are some akad/contract in sharia insurance
1. Tijarah Agreement
Tijarah contracts are all forms of contracts that are conducted for commercial purposes. Both mudaraba or wakalah bil ujrah. From the beginning when filling out the Life Insurance Application Letter, participants have agreed to all the terms of the stated Agreement.
The purpose of commercial purposes in the mudharabah contract, namely the investment management carried out by insurance companies (as mudharib) whose funds are obtained from the contribution funds/premiums of insurance participants (sohibul mal). This is done to get the maximum benefit in investment management for all parties. While wakalah bil ujrah is a contract where participants give power / wakalah to the insurance company as a customer representative in managing their funds in exchange for the granting of the ujrah (fee). The nature of the contract is trustworthy, so the insurance company only acts as a representative (who manages the funds) so that the company does not bear the risk of investment losses. There was also no reduction in fees received by the company, except because of carelessness or default.
2. Tabbaru Agreement
Tabarru contract 'is all forms of contract conducted with the purpose of virtue and help, not just for commercial purposes. The contribution/premium funds collected are bissyarthi grant funds (with conditions) managed by insurance companies. Furthermore, bissyarthi's grant funds (with conditions) collected are used for insurance claims for participants affected by the disaster. ,
There are some excellences of Islamic insurance
A. The principle of sharia insurance contract is takafuli (mutual help). one customer helps another customer who is experiencing difficulties. Whereas conventional insurance contracts are tadabuli (buying and selling between customers and companies).
B. Funds collected from customers of sharia insurance companies (premiums) are invested based on sharia with a profit-sharing system (mudharabah). Whereas in conventional insurance, investment funds are carried out in any sector with an interest system.
C. The collected premiums are treated as permanent funds belonging to customers. The company is only a trustee to manage it. Whereas in conventional insurance, the premium belongs to the company and the company has the full authority to determine the fund management policy.
D. If a participant is affected, for the payment of a customer's claim the funds are taken from the Tabarru account (social funds) of all participants who have been granted assistance. Whereas in conventional insurance, claim payment funds are taken from the company's account.
E. Investment benefits are divided in half between the customer as the owner of the fund and the company as the manager, with the principle of profit sharing. Whereas in conventional insurance, profits fully belong to the company. If there is no claim, the customer does not get anything.
F. The existence of the Sharia Supervisory Board in sharia insurance companies which is a must. This board plays a role in overseeing management, investment products, and policies so that they are always in line with Islamic law. As for conventional insurance, it does not receive attention.
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Conclusion
fatwa and general guidelines for sharia insurance are not just theories, but it is very possible to adopt it. therefore a lot of Islamic insurance has been established in Muslim-majority countries, even in Muslim minority countries emerging sharia-based insurance. And hopefully all insurance company will adopt the sharia law to their policy.
References
Syaikh Abu Bakar Jabir al-Jaza'iri “Minhajul Muslim, the ideal concept of life in islam", Maktabah al-Ulum wa al-Hikam, Madinah, 2009.
Muhammad Syakir Sula, AAIJ. FIIS, sharia insurance, Jakarta: Gema Insani Press.
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