The ruling on takāful (Islamic insurance)

Question

What is the ruling regarding takaful? Can I get my car covered under takaful coverage?

— Abdul Basit, Karachi, Pakistan

Answer

Note: The answer provided is issued to the particular inquiry and the location of the inquirer. It is important to note that rulings on insurance policies vary depending on the laws of the country of residence and whether one is dealing with Muslims or non-Muslims.

Takāful is another form of insurance, and insurance policies involve one of the two:

1) individuals either entrusting funds to a company for investment, securing a promised return with future profits

2) or assuming a risk by paying premiums, with the company investing these funds as well, offering potential returns in the event of a covered incident.

The first situation is of interest (ribā), whereas the second situation is of gambling (qimār), which both have been deemed ḥarām in ‘Islām. Sayyidī ‘A`lā Ḥaḍrat states regarding the ruling of ribā and qimār,

دونوں حرام و سخت کبیرہ ہیں۔

“Both are ḥarām and severely grave [sins].” [Fatāwā Riḍawīyah: Vol. 23, Pg. 595]

Any profits derived from lending money to a Muslim or engaging in transactions of gambling with a Muslim must be returned to the rightful owners, as such wealth is deemed ḥarām. If the rightful owners cannot be identified, it must be given as ṣadaqah (charity to a needy Muslim), with the intention of reward solely for the benefit of the actual owner, not for oneself. `Allāmah ‘ibn `Ābidīn al-Shāmī states,

أنه إن علم أرباب الأموال وجب رده عليهم وإلا فإن علم عين الحرام لا يحل له ويتصدق به بنية صاحبه

“Certainly, if one is aware of the rightful owners of the [ḥarām] wealth, returning it is obligatory, if not, but the nature of the ḥarām [wealth] is clear, it is not permissible for him, and he must offer it in ṣadaqah with the intention of benefiting the true owner.” [Radd al-Muḥtār: Vol. 5, Pg. 220]

It is stated in Majma` al-‘Anhur,

ولو تصدق على فقير شيئا ‌من ‌المال ‌الحرام يرجو الثواب يكفر ولو علم الفقير بذلك فدعا له وأمن المعطي كفرا

“If one offers anything from ḥarām wealth as ṣadaqah to a needy individual (faqīr) with the hope of reward, he has committed kufr (i.e., he has left the folds of ‘Islām). Furthermore, if the faqīr is aware of this and makes du`ā for him [out of appreciation] and the offerer says ‘‘āmīn,’ then both have committed kufr.” [Majma` al-‘Anhur, Kitāb al-Siyar]

What sets Takāful apart is its commitment to investing clients' funds in ḥalāl (permissible) businesses. However, this distinction does not negate the presence of ribā (interest) and/or qimār (gambling), rendering it impermissible to insure one's car through Takāful or any other Muslim insurance company, and Allāh Ta`ālā knows best.

Faqīr Sayyid 'Asad al-Qādirī · (may he be forgiven) · Dhū al-Ḥijjah 6, 1445

Verified by Muftī Zāhid Ḥussain al-Qādirī