The Ruling on Insurance and Takaful in Islamic Jurisprudence

Abstract

In Islamic jurisprudence, the ruling on insurance and takaful is one of the most important and controversial topics in contemporary financial transactions. Insurance is an economic contract in which a person insures himself against possible financial loss, but this transaction must be in accordance with Islamic principles. Takaful is an Islamic alternative based on partnership, cooperation, and sharing of losses. The purpose of this study is to: Identify different types of insurance (commercial, social, health, etc.). To assess whether such contracts are permissible from the perspective of Islamic jurisprudence or not? And to introduce takaful as a legitimate Islamic alternative. Insurance contracts play a very important role in contemporary societies, so it is very important to determine what their status is from the perspective of Islam. Muslims want to choose ways to provide financial security that are in accordance with Sharia and lead to the development of the Islamic financial system.  This topic is a bibliographic topic. To prove the topic, verses of the Holy Quran and hadiths of the Prophet Muhammad (peace be upon him) have been mentioned. The translations of the verses and references to jurisprudential books have been taken from reliable jurisprudential authorities. Insurance is considered illegal by many jurists due to interest, gharar, and gambling. Takaful is considered a legitimate alternative based on Islamic principles. Takaful has been approved by contemporary jurisprudential councils such as the Academy of Islamic Jurisprudence and Islamic banking institutions. Muslims, banks, and financial institutions can provide services through the Takaful system.