shababfinacecolumnInsurance Continued…
It seems we have stirred a large debate regarding insurance. You may recall edition 45 where I talked about if Insurance is haraam and different to death committees.
We touched upon the issue of what happens when a Muslim dies with debt, and has no insurance to repay their debts.
First of all, for those of you that thought I was advocating insurance as Halal, this was not the case. I said my view is insurance per say is haraam (forbidden), but I took the debate further. Insurance is regarded as haraam because of where the insurance company invests the funds.
First of all thanks for all the comments. Many of you agreed with me in that Islamic scholars have failed to look at what else is out there that can protect a Muslim from dying in debt.
Some of you highlighted grave concerns that you leave your affairs in the hands of God, but you feel that God has given us a brain, and we should use our brains to sort out affairs before death. One of you went as far as to say is it not our duty if our religion says you should not die owing people money to use takaful insurance (a form of cooperative insurance, run according to Islamic Law).
Unfortunately, there is no takaful insurance in the UK at the moment. I believe this maybe launched by a bank in a year or two but I am sceptical whether they will be able to launch such a complicated product so soon.
One of you felt this obsession with committees is damaging the community. Why? Well because having say £3000 worth of benefits when paying £20.00 a year may put off some people actually thinking how much money your family needs on death. I agree with this because £3000 in this day and age does not go a long way. The reader highlighted what’s the guarantee the money is still there as lets face it money does go missing in some voluntary organisations.
The crucial message that was received from the readership was scholars should stop putting their hands in the sand and not listening to real concerns of Muslims.
We need clarity on what a Muslim should do if he has debt to sort his affairs on death. We need to know if these committees are Halal, and we need to know if insurance is permissible under the rules of necessity when one has debt but does not wish to die with debt.
Next month. Islamic wills, but what about my Inheritance Tax Bill?

Disclaimer: Please note views expressed in this column do not represent views of any financial institution or financial advisor.