Does planning ahead go against trusting Allah?

Some people think a Muslim should not plan for bad days. They say: Allah will provide, so why worry about accidents, illness or death? But Islam teaches both. Do what you can, then leave the result to Allah.

• A man asked Nabi ﷺ: should I tie my camel and trust Allah, or leave it loose and trust Allah? He said: tie it, and trust Allah¹.
• Nabi ﷺ said: if you trusted Allah as you should, He would feed you as He feeds the birds. They go out hungry in the morning, and come back full². The bird trusts Allah, but it still goes out to look for food.
• Nabi ﷺ told Sa'd: it is better to leave your heirs rich than to leave them poor, asking people for help³. Thinking about your family after you die is good, not greedy.
• Allah says: people who would worry about the weak children they leave behind should be mindful of Allah, and say what is right⁴.

The prophet Yusuf (Joseph) planned for a famine years before it came. He told the people to farm for seven good years and store the harvest, except the little you eat. That food was for the seven hard years that came after⁵.

So the question is not whether a Muslim may protect his family. He may, and he should. The only question is which way of protecting them is halal. That is what this chapter is about.

Is sharing a loss an Islamic idea?

Yes. Helping each other carry a loss is not new. It goes back to the time of Nabi ﷺ.

• Allah says: help one another to do good and to be mindful of Allah. Do not help one another to sin and do wrong⁹.
• Nabi ﷺ praised the Ash'ari tribe. When their food ran low on a journey, or their families in Madinah were short, they put all their food together on one cloth, then shared it out equally. Nabi ﷺ said: they are from me, and I am from them¹⁰.
• Once, one woman killed another in a fight by throwing a stone. Nabi ﷺ said the blood money would be paid by the killer's relatives together, not by her alone¹¹. This shared duty is called the 'aqilah. It shows that carrying a big loss together is part of Islamic law.

Scholars on every side agree: a group that helps its members in hard times is doing good. They only differ on whether today's insurance companies do this in a halal way.

How does normal insurance work?

Here is a normal insurance contract in plain words:

• You pay the company a fixed amount every month or year. This is called the premium.
• The company promises: if a certain loss happens, like a car crash, a fire or an illness, it will pay for it, up to a limit.
• If nothing happens, you get nothing back. The company keeps your money.
• The company owns the money it collects. It invests it, often in bonds and other things that pay interest. It keeps the profit for its owners.

So the company is betting on numbers. It collects from many people and pays out to the few who have a loss. That is how it makes money. This is called commercial insurance or conventional insurance. In this chapter we call it normal insurance.

Why do many scholars worry about it?

Note: these scholars see the problem in the contract, not in wanting to be safe. Wanting to protect your family is good.

What do scholars say about normal insurance?

Scholars today differ on normal insurance. Here are both views, fairly.

View 1: not allowed, unless the law requires it or you truly need it

• This is the view of many scholars and the big Islamic law councils, including the International Islamic Fiqh Academy. Some early Hanafi scholars who first wrote about insurance also did not allow it.
• Their reasons are the three worries above: too much uncertainty, something like gambling, and interest.
• They allow takaful (insurance where members help each other, explained below) as the halal way.
• They allow normal insurance when the law requires it, or when there is a real need and no takaful.

View 2: allowed

• Some well-known scholars of the last century allowed normal insurance. Some scholars living in the West allow it where there is no takaful.
• They say it is a way of sharing risk, not a game of chance. Nobody buys home insurance hoping their house burns down. People buy it for peace of mind.
• They say you are not buying the uncertainty. You are buying a clear promise of protection. So the uncertainty is small and forgiven.
• They compare it to the 'aqilah and other old ways of sharing a loss. They say trade is halal unless proven otherwise: Allah has made trade halal¹⁵.

What is takaful?

Takaful means "looking after each other". It is a way to get protection that most scholars accept. Here is how it works:

• Members give into a shared pool. Your payment is a donation (tabarru') to the pool. You give it meaning to help any member who has a loss. You are not buying a promise from a company.
• Losses are paid from the pool. If you have a loss the plan covers, the pool pays you, just as it would pay any member.
• Money left over belongs to the members. If the pool has money left at the end of the year, it can be given back to members, kept for future years, or given to charity. It does not just become the company's profit.
• A company runs it for a fee. The company manages the pool, pays claims and does the paperwork. It earns a set fee (called wakalah), or a share of the profit from investing the pool (called mudarabah).
• The money is invested only in halal ways, with no interest. A board of scholars checks this.

Some honest points

• Takaful is common in many Muslim countries. But in many Western countries it is hard to find, or not offered at all.
• Some scholars say some takaful companies work almost like normal insurance in real life. Look for one with a trusted board of scholars and clear rules about the money left over.
• A mutual company is owned by its members. It is closer to takaful than a normal company. But it is not the same if it invests in interest. Ask a scholar about a specific company.

What if the law makes you take insurance?

Many countries make some insurance required by law. For example:

• Car insurance to drive on public roads.
• Health insurance in some countries.
• Travel medical insurance to get some visas.
• Insurance a business must have, like cover for its workers.

In almost all views, you may take insurance the law requires. You have no real choice, and Allah does not give a soul more than it can carry¹⁶. Driving, working and seeing a doctor are real needs of normal life. To learn how need works, see Doubtful things, need and mistakes.

• Scholars who hold the stricter view advise: take only what the law requires, like the basic car cover. Use takaful for it if you can.
• Scholars who allow insurance say you may take fuller cover too.

What if a lender or landlord requires it?

A home loan often comes with home insurance you must have. A rented flat may require tenant cover. Many scholars treat this like a legal requirement. If you have the home finance or the lease, you may take the insurance that comes with it. Whether the home loan itself is allowed is a separate question. See Buying a home.

What about insurance from your job?

Your employer may give you health, dental or life cover as part of your pay. Most scholars allow it. You did not make the contract. It is part of your wages.

Can you take health insurance?

Protecting life and health is one of the main goals of Islamic law. Getting medical care is a real need. So scholars take health insurance seriously.

• If the law requires it, or your employer gives it: allowed, as explained above.
• Health takaful, where you can get it: allowed, and the safer choice.
• In countries with free or public health care (paid for through tax), there is usually no question. Paying tax is not buying insurance.

What if care is very expensive and there is no takaful?

In some countries, one hospital stay can cost more than a family earns in years. In that case:

• Many scholars who hold the stricter view still allow health insurance, because of real need. Without it, a family may not be able to get care, or may fall into huge debt with interest.
• Scholars who allow insurance say it is allowed anyway.
• Some scholars stay strict. They say avoid it if you can, by using charity clinics, community health funds, or your own savings.

If this is your situation, ask a scholar who knows your country. Do not put your family's health at risk out of fear.

Can you take life insurance?

Life insurance pays money to your family when you die. Taking it does not mean you doubt Allah's plan for your life. The time of your death is already written, and no policy changes it. Life cover is only about money for the people you leave behind. It is like tying the camel.

What scholars say

• Most scholars and Islamic law councils: normal life insurance is not allowed. You pay small amounts for a large unknown sum. That has too much uncertainty and is like riba and gambling. The worry is strongest for policies that also build up savings or investments, because these usually grow with interest.
• Other scholars: allow it, especially simple term cover where there is no family takaful. Term cover only covers you for a set number of years, with no savings part. They see it as a way to protect a family.
• Family takaful is the choice most scholars accept. It works like the takaful above, for death and long illness.

Other halal ways to protect your family

• Build up savings and halal investments over time. See Shares, funds and pensions.
• Pay off your debts. Write down what you owe and what others owe you.
• Write a will. See Wills and inheritance.

Who gets the money when you die?

Scholars differ here too. Some say a life insurance payout is part of what you leave behind. So it must be shared by the inheritance shares in the Quran. Others say it is a gift to the person named on the policy. Ask a scholar, and check your local law, before you choose who gets it.

What about warranties and phone insurance?

The maker's warranty

Say you buy a new item and the price already includes a warranty: a promise to fix or replace it if it is faulty. All scholars allow this. The seller is only promising that what you bought works. Islam already makes a seller responsible for hidden faults.

Extended warranties you pay extra for

• Some scholars: this is a kind of insurance. You pay for repairs that may never happen, so it has too much uncertainty. They say avoid it.
• Other scholars: allow it. This is especially when the seller or maker offers it as a repair or service plan for a known item, and the price is small.

Phone and gadget insurance

This is normal insurance that you choose to buy. So the same difference applies. The stricter view says leave it. The easier view allows it. A simple halal choice for everyone: put a little money aside each month in your own repair fund, and buy a good case. If nothing breaks, the money is still yours.

Can you keep a payout bigger than what you paid?

Say you paid a small amount in premiums. Then you had a big loss, and the insurer paid you much more. Can you keep it all? It depends on the view you follow, and why you had the insurance.

• Scholars who allow insurance: keep it. It is your right under a contract you were allowed to make. Allah says keep your contracts¹⁷.
• If the law required the insurance, or you truly needed it: many scholars say you may take what covers your real loss, like fixing the car or paying the hospital. That is what the insurance was for.
• Takaful: the pool pays you as a member. Keep it.
• Some stricter scholars say this: if you chose insurance you did not need, keep only what you paid in. Give the rest to the poor to clean your money, not hoping for charity reward. Then repent and do not renew it.

What do people wrongly think is haram?

• Saving for emergencies. Yusuf did it¹⁸. It is not weak faith.
• Car insurance the law requires. Allowed in almost all views.
• Health or life cover from your job. Allowed by most scholars.
• A maker's warranty included in the price. All scholars allow it.
• A family or community fund where people give to help members in trouble. This is exactly what the Ash'aris did¹⁹.
• Thinking about death and planning for your family. It is the sunnah, not bad luck²⁰.

Common questions

There is no takaful where I live. What do I do?

Take what the law requires, and what comes with your job. For other insurance, scholars differ. The stricter view allows it only for real need. The easier view allows it. Follow a scholar you trust, and save an emergency fund either way.

Should I take full car cover, or only the basic cover the law requires?

Stricter scholars advise only what the law requires, using takaful if you can. Scholars who allow insurance say full cover is fine. Both views are held by real scholars.

I need travel insurance to get a visa. Is it allowed?

Yes. You need it for the visa, so it is like insurance the law requires. It is allowed in almost all views.

Is life insurance against trusting Allah?

No. Protecting your family is tying the camel²¹. Scholars differ on the contract itself. Most say avoid normal life insurance and use family takaful. Some allow simple term cover where there is no takaful.

A client says my small business must have liability insurance to work with them. What now?

Many scholars treat insurance you must have to do your work as a real need, like a legal requirement. Use takaful if you can. Ask a scholar about your exact case, and check your local law.

The shop offered me a phone protection plan. Should I buy it?

Scholars differ. Some say it is insurance, so leave it. Others allow it. A safe choice for everyone: skip it, and save a little each month for repairs yourself.

I had normal insurance for years under the easier view. Now I follow the stricter view. Was I sinning?

No. You followed a view held by real scholars. From now on, follow what you now believe. Move to takaful if you can when your policy ends.