Question

1. What problems an economy may face in the absence of institution of insurance?
2. Why some people consider purchasing insurance policy is against the spirit of Islam?
3. How do you think that insurance is in conformity with shariah?
4. Write an Islamic critique of conventional insurance.

Answer 1

1) Consumers can't get a credit to buy a home, vehicle, pontoon or plane without evidence of protection. In like manner, entrepreneurs and would-be business people can't get financing to purchase a business building or business gear, or in any case put resources into their business, without evidence of protection.

Loan specialists won't loan without verification of protection, in light of the fact that the hazard would be excessively high.

Without financing, organizations can't grow, and when organizations can't extend, they don't make occupations. Actually, they may lay off a portion of their representatives. Without occupations, customers have less cash to spend and the economy stagnates. After some time, people groups' personal satisfaction endures, in light of the fact that their salary diminishes.

Regardless of whether organizations are propelling another item, marking another deal or buying another organization, the business needs affirmations that the other party is directing business in compliance with common decency. Protection gives important security, on the off chance that business doesn't continue as arranged.

In like manner, organizations would be hesitant to enlist new representatives notwithstanding laborers' remuneration protection, which ensures the business while giving the worker salary when a mishap briefly puts the worker out of work.

The U.S. protection industry pays out more than $300 billion every year in approach advantages and claims.

These assets help guaranteed purchasers and organizations recuperate from their misfortunes, regardless of whether it's lost property, the misfortune from a claim or the departure of a friend or family member. Assets paid out by safety net providers empower individuals to remake, keep up their way of life after a provider kicks the bucket or gets incapacitated, and supplant property that is taken or harmed. For organizations, installment from cases might be vital for a business to keep working, yet protection is additionally used to get ready for progression, shield licensed innovation and pay harms from unexpected risk.

2) Many Islamic researchers censure the arrangement of ordinary protection as exploitative and crooked. They bring up that paying cash for something, with no assurance of advantage, includes high uncertainty and hazard. One pays into the program, however, one might possibly need to get remuneration from the program, which could be viewed as a type of betting. The protected consistently appears to lose while the insurance agencies get more extravagant and charge higher premiums.

3) Conventional protection is a sort of protection that is a Risk Transfer Mechanism with the hazard is expelled from the arrangement holder who is the person as safeguarded to the insurance agency in the impression of the protection premium that is paid by the approach holder.

There is a component of vulnerability, otherwise called gharrar which is restricted in Islam. This vulnerability identifies with whether there is probably going to be a misfortune and afterward how much pay should be paid.

There is a part of betting, which is known as Maisir which is the sum that the protected individual pays as a premium in accordance with the desire that remuneration will be paid. Accordingly, if the misfortune that they are foreseeing doesn't occur, the arrangement holder will lose the sum that they have paid. Notwithstanding, on the off chance that there is a misfortune, at that point the protection supplier will lose more than they have been paid by means of the premiums.

Most of the assets are put resources into securities, TFC's, and protections to give some examples, all of which accompany fixed loan costs thus, there is a component of Riba to it, which isn't allowed in Islam.

Any benefits will go directly to the investors however the arrangement holder won't perceive any profits toward the finish of the concurred time of spread.