Fatwa on Life Insurance in Islam [Updated]

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Hi all readers! Are you looking for an explanation of the fatwa on life insurance in Islam? If your answer is “Yes”, congratulations! Now you are reading the right article. Why? Because that’s what I’m going to explain in this article. As a Muslim, you have to understand that. That’s why I wrote this article. So, you should read it to the end!

Specifically, there are some important things about fatwa on life insurance in Islam which I will explain in this article. The some important things I mean are as follows:

A. Life Insurance in Islam: Basic Things You Must Understand.
B. Life Insurance in Islam: Halal or Haram?
C. 5 Fatwa on Life Insurance in Islam.

Life Insurance in Islam: Basic Things You Must Understand

The important thing about fatwa on life insurance in Islam which I will explain now is life insurance in Islam: basic things you must understand. I want you to understand that first before you read more explanations in this article because that is one of the basic things in this discussion that must be well understood.

Life insurance is one type of insurance that is used to protect against the impact of financial losses or loss of income of a person or family due to the death of a family member.

In simple terms, life insurance is a type of insurance that aims to cover a person or family against unexpected financial losses due to the death of the policyholder.

In Islam, according to some experts in Islamic law, life insurance funds must be managed according to Islamic rules.

The main difference between life insurance in Islam and conventional life insurance lies in the basic concepts and ways of managing funds in accordance with Islamic principles. Life insurance in Islam is insurance based on the principle of mutual help and protection among participants through contributions to the “Tabarru Fund”, which is a collection of benevolent funds from the contribution of sharia life insurance participants who agree to help each other if there is a risk between them. These funds are then managed according to sharia principles and under the supervision of the sharia board to deal with certain risks.

If there is a risk to the participant, insurance compensation will be paid from the Tabarru Fund. This concept is also known as risk sharing. Meanwhile, in conventional life insurance, customers pay a premium for the protection they buy from an insurance company. If there is a risk to the customer, the life insurance company will provide a number of insurance benefits. This concept is also known as risk transferring.

There are some basic differences between Islamic life insurance or sharia life insurance and conventional life insurance in terms of contracts, ownership of funds, surplus underwriting, investment management and insurance supervision. In sharia life insurance, there are several types of transactions that must be avoided, namely gharar or uncertainty, usury or additions and maysir or gambling. So, customer funds in sharia jJiwa insurance, especially unit links, will not be invested in things that are contrary to Islam, for example financial and banking products with the concept of usury, cigarettes, and liquor.

That’s a brief explanation of life insurance in Islam: basic things you must understand. As Muslims, we must understand that.

Life Insurance in Islam: Halal or Haram?

The important thing about fatwa on life insurance in Islam which I will explain now is life insurance in Islam: halal or haram? I want you to understand that because it is one of the important questions about life insurance that some Muslims don’t understand very well.

If we understand some of the previous explanations, we can conclude that life insurance in Islam is halal insurance. The reason is because life insurance funds in Islam are managed according to Islamic rules.

There are several specific reasons why life insurance in Islam is halal insurance:

One: there is an element of protection in life insurance in Islam.

Two: there is an element of mutual assistance in life insurance in Islam.

Three: there is an element of goodness in life insurance in Islam.

Four: there is an element of risk and profit sharing in life insurance in Islam.

Five: life insurance is part of muamalah

That’s a brief explanation of life insurance in Islam: halal or haram? As Muslims, we must understand that.

Read Also:

Concept of Takaful (Islamic Insurance)

5 Fatwa on Life Insurance in Islam

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Founder, Author, Indonesian Blogger, Muslim, Graduate of Al-Azhar University, Cairo, Egypt.

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