Is Insurance is Halal? - An Explanation of the Arguments For Insurance

In this video we explain the 3 key arguments for why we humbly consider insurance to be permissible. This is a minority view, but one shared by a number of heavy-weight and well-respected scholars. This is also not a fatwa, just our considered and researched view.

For fatawa see our Fatwa forum - http://forum.islamicfinanceguru.com/ - please note that this is not the view of the muftis on this forum. They're with the majority on this.

Please also note that we are very supportive of the takaful insurance industry. Our argument in the video is a technical one - not a moral one. Morally takaful insurance is far better than conventional insurance as it invests in halal assets, and holds itself up to a higher moral standard. It is a separate question whether any takaful operator today has fully realised the promise of this vision, but nevertheless, we as Muslims should prefer takaful insurance over conventional when the opportunity presents itself.

We would love to hear your thoughts, question, advices and comments too!

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TIMESTAMPS
The issues in a nutshell
00:53 - What is agreed and what is disputed in this debate
02:05 - Arguments against conventional insurance
02:50 - Why takaful or cooperative insurance is seen as halal
Argument 1: The gharar Islam forbids is not the gharar of insurance
03:33 - What gharar does Islam forbid and why do people think it applies to insurance
05:50 - The issue with this kind of analysis & benefits of big data
07:20 - The consumer is also not being exploited - price comparison
07:55 - Security Guard analogy to insurance
Argument 2: The Prophet allowed some degree of gharar in some circumstances
09:25 - Insurance allows certainty in people's lives - vastly beneficial
09:55 - Prophet allowed a transaction that was beneficial for community
10:46 - two situation in which Prophet accepted unequal exchanges
13:09 - How insurance is helpful to people in society?
Argument 3: The Takaful argument
14:51 - Takaful is like conventional insurance - so both should be allowed
16:33 - Takaful companies have had to compromise to modernity and are profit-focused - and that's good
18:06 - Final thoughts - life insurance, compulsory insurance, and takaful insurance

Who are we:
We are two Oxford grads who have studied Islamic finance both at uni and classically for over 6 years. We worked in the City for a number of years, then We quit our corporate law jobs to go full-time on IFG in 2020. We are on a mission to help 25% of the world's population with their personal finances.

Islamic Finance Guru (IFG) is an Islamic finance comparison and analysis site that helps people with their investment, personal finance and entrepreneurial journeys.

We do this for one reason: to make our community better-off. We want to take Muslims from being among the poorest in society to the richest. We think that this is the most effective way to deal with problems like discrimination, under-representation and poverty. For more about the team visit: https://www.islamicfinanceguru.com/ab...

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