Insurability and Suicide: Shariah Issues in Underwriting

Abstract

Common suicide clauses preclude protection coverage for insureds whokill themselves during the first few years of exemption. Similar clauses have beenadopted by Islamic insurance (takaful) companies. Is this justan emulation of what has been practiced by the conventional insurer or is there any basis in Islamic law that supports this practice?This paper attempts to examine the Islamic perspective on the act of suicide and the current practices of the Malaysian takaful operators regarding the coverage of this event.The issue is whether it is appropriate for takaful operators to exclude the coverage in the event of suicide, as it is established based on mutual help, solidarity and brotherhood. Although suicide is an unacceptable act in Islam, the main concern in the case of theoccurrence of this act is the welfare of the next of kin who may have lost their main breadwinner. It was found that, in the past, the act of suicide was not covered by takafuloperators, and, thus, the beneficiaries are not entitled to claim compensation on the death of the participant due to suicide. However,it is observed that thepractice is changing, whereby the trend is that takaful operators are allowingthe beneficiaries to claim compensation on the participant s death due to suicide albeit after the exemption period. The paper explores the Shariahjustification deliberated by theShariah committee members of the takaful operators in their decision to allow such compensation. The main focus of our examination is whether this practiceis allowed in accordance with the purpose of Islamic law (maqasidal-Shariah).