Islamic Ruling on Insurance and Review of the Current System

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❖ Question:

What is the Islamic ruling on insurance?

❖ Answer by:

Shaykh Abdul Wakeel Nasir ḥafiẓahullāh

✿ The Nature of Contemporary Insurance:

The modern-day insurance system—regardless of whether it is labeled as Takaful or Kafālah—is essentially composed of various forms of Ribā (usury), where only the terminology has been altered.

✿ Core Issues with Insurance:

① The current insurance framework is fundamentally based on Qimār (gambling) and Ribā (usury).
② Numerous scholarly discussions and sittings have taken place with scholars and jurists from different schools of thought regarding this matter.
③ However, they have failed to establish its permissibility under the clear principles of Sharīʿah.

✔ Conclusion:

Since the current insurance system involves a mixture of gambling and usury, it is therefore Islamically impermissible, and one is instructed to abstain from it.