Insurance: A Protective Measure
Insurance: A Protective Measure: The literal meaning of Insurance defines it as a contract or agreement by which a company or the state undertakes a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.‘
For a common person insurance is an agreement in which a person pays certain amount of money to a company every year and in return the company pays back if something unpleasant happens.
The issue of insurance has been confusing to many. Some believe that only those who lack faith would seek protection by insurance. But insurance does not prevent accidents. It is merely a mean of compensating one’s family or others in the event of such a loss so that they can be economically stable.
Many scholars are in a view that as life takes precedence in all matters under Islamic shariah, health insurance is permissible. Muslims must strive to educate themselves and work hard and develop a system of welfare where such insurance becomes pointless. But till that time, Muslims need to carry health insurance for their own well-being and survival.
One school of thought argues that human beings are not promised to live hazard-free lives, devoid of disaster and difficulty. In daily lives we should be prepared to have to encounter various difficulties but as our God has promised that He will not allow us to suffer beyond what we are able to bear.
In the utilitarian point of view or of “welfare economics,” the main aim of insurance is redistribution of wealth. Insurance redistributes money collected from a larger group to those who suffer some unpleasant incident or health issues that can be mitigated with money. Those who suffer such misfortunes find greater utility from the money than those who pay premiums but have no misfortune, so this redistribution increases total utility.
In most of the developed countries it is mandatory to have health and as well as vehicle insurance. However, it is a longstanding debate in few Muslim groups whether the Insurance concept is Islamic or not. Therefore, In a nutshell one has to take precautionary measures to safeguard him/herself from the adverse effects of disaster. It is written said in Bible in proverbs 27:12 “A prudent man foreseeth the evil, and hideth himself; but the simple pass on, and are punished.”