Abstract
Life insurance under Islamic discipline is quite different from that which is practised under the conventional system. An Islamic model of a life insurance policy, however, is a financial transaction based on the principle of the Al-Mudharabah financing technique, relying on the principle of mutual co-operation, undertaking a responsibility towards safeguarding widows, orphans and other dependants of the deceased (assured/policyholder) from unexpected future material risk. The nominee(s) in the life insurance policy who is appointed by the assured, is not an absolute beneficiary(s) over the policy but a mere trustee who receives the benefits and distributes them among the heirs of the deceased (assured) according to the principles of Mirath (inheritance) and Wasiyah (bequest).
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Notes
- 1.
Fatwa issued by the National Council for Muslims Religious Affairs in Malaysia, see in [1974] I MLJ at x.
- 2.
The Fatwa was on succession and wills (1974) IMLJ at X.
- 3.
Sunan Al-Tirmidi, Cagri Yayianlari, Istanbul Vol. 4, 1981, in Kitabu Sifatul Qiyamat Wal-Raqaiq Al-Wara, Bab 60, NO. 2517 at 668.
- 4.
See in Siddiqi, M.N., “Muslim Economic Thinking: A Survey of Contemporary Literature”, (Ed.) Ahmad, Khurshid, in Studies in Islamic Economics, The Islamic Foundation, U.K. 1980 at 2116. Also see “Al-Tameen Alal Hayat Gaire jaizin Shar’an” in Al-Iqtasadul Islami, July 1995 at 60, and also see Hadagha, Refat Mohd., ‘Insurance Contract and Its Provision in the Islamic Shari’ah’, IIU Malaysia, (U.P.), 1995, at 17.
- 5.
It was deemed so in a Juridical Conference held in Mecca in Saban, 1398H.
- 6.
Sahih al-Muslim, as compiled in An Nawari, Riyadus Saleheen, Vol. No. 245.
- 7.
See the Judgement of the Supreme Court of Pakistan in Amtul Habeeb v Musarrat Parveen, [1974] PLD 185
- 8.
This principle has been laid down in a Fatwa issued by the National Council of Muslim Religious Affairs, Malaysia. See in [1974] IMLJ at X.
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Billah, M.M. (2019). Preview of Islamic Life Insurance Products. In: Islamic Insurance Products. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-17681-5_20
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DOI: https://doi.org/10.1007/978-3-030-17681-5_20
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