Islamic Insurance vs. Conventional Insurance: A Comparative Case Study

Abstract

Insurance plays a very vital role in the modern world economic system. Because of its role in providing socio-economic prosperity and security to life and property it has been recognized as an essential service throughout the whole world. But one Islamic scholar declare the insurance as unislamic due to the elements of Gharer (uncertainty), Maisir (gambling) and Riba (interest) involved in the operation of insurance contract. According to a saying of the Holy prophet (SM), “which he told to a Bedouin Arab, who left his camel unchained to the will of Allah,” tie the camel and then leave it to the will of Allah.” In another hadith the prophet (SM) advised to help one another in furthering virtue and God consciousness and do not help another in furthering evil and enmity. In view of these hadiths it’s established that concept of insurance does not contradict with shariah. Though the sharia support the insurance but not conventional insurance.