I Will Always Protect You

Do you need protection? Image source: http://www.bollywoodhungama.com

We're going to cover the topic of insurance, something I only know very little about and much less so on takaful but I'll give it a try.

Insurance is transferring risks to another party who chooses to absorb the risks whilst you have obligation to pay monthly premiums to said party. For example, I am exposed to many risks when I choose to drive. Risk of getting into an accident, injuring myself, injuring others, damage to vehicles or private/public properties, and so on. You can keep going on and on about associated risks you can think of whilst driving, risks that haven't occurred but might. The risk varies from each person through many variables, such as the town the person drives in, type of driver the person insured and profile of drivers in town. With insurance, I am given the ability to transfer that risk to a company in return that I am obligated to pay $70/month.

Insurance is about uncertainties. The three uncertainties mentioned in step 26 is auto, life, and disability. Life and disability is different to auto because the risk it focuses on is the risk of losing the ability to earn income through death or health. You may have a family that wants those risks covered because they depend on your income, because once you lose your income, things quickly spiral into a big pile of mess.

We now have a problem; the problem of risks and the religious obligation to avoid insurance because it is profiting from excessive risks due to gharar (uncertainty) . You can probably think of a million risk from driving. It is financially impossible for both individual and corporation to cover them all. So, the option we have is to seek takaful companies that are financially able to cover the risks you need covered at a monthly premium you can afford. 

The last part of step 26 is redistributing your wealth once you passes. This is a big topic that needs its own post and in series. And with that, we'll close this post that underlines the importance of protection as part of financial security, for ourselves and the family we leave behind.

And let those [executors and guardians] fear [injustice] as if they [themselves] had left weak offspring behind and feared for them. So let them fear Allah and speak words of appropriate justice. 

4. Surat An-Nisā' (The Women; 9)

Would one of you like to have a garden of palm trees and grapevines underneath which rivers flow in which he has from every fruit? But he is afflicted with old age and has weak offspring, and it is hit by a whirlwind containing fire and is burned. Thus does Allah make clear to you [His] verses that you might give thought. 

2. Surat Al-Baqarah (The Cow; 266)