IS A RIOT FUND OR INSURANCE ALLOWED?

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IS A RIOT FUND OR INSURANCE ALLOWED?

QUESTION:

Assalamualaykum Respected Mufthisaaap 

Kindly Advise on the Following Questions.

1. Is Medical Aid or Hospital Plan Allowed or just One them.

2. Is Retirement Annuity Allowed for the Purpose of TAX...bringing the Tax Payment down.

I have an income from my Father’s Estate every 6 Months of R340 000. The Tax is R90 000 every 6 months. I Believe by having this Fund the Tax comes Down by R40 000

3.Is a Riot Fund or Insurance Allowed. For my Property I dont have any insurance at the moment for my Property or Cars or home.. but with some Ishikara I personally made for something different in Investments..i saw in my Ishikara that they will be Riots in South Africa or very heavy Punishment to the Present Government ..so just worried they might burn shops or etc..ALLAH Tha"ala knows best.

ANSWER:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

It is not permissible to take out conventional insurance due to it having elements of interest, gambling and uncertainty (Gharar), all of which are prohibited in Shariah. See the following narrations:

عن جابر قال لعن رسول الله صلى الله عليه وسلم آكل الربا وموكله وكاتبه وشاهديه وقال هم سواء. (صحيح مسلم (3/ 1219)

Translation: Hadhrat Jabir (Radhiyallahu Anhu) narrates that Rasullullah (Sallahu ‘Alaihi Wasallam) cursed those who are involved in usury; whether it is the person who is giving usury, receiving it, writing the transaction or witnessing it. (Muslim) 

عَنْ أَبِي هُرَيْرَةَ قَالَ: نَهَى رَسُولُ اللهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ عَنْ بَيْعِ الغَرَرِ، وَبَيْعِ الحَصَاةِ (سنن الترمذي: 2\523)

Translation: Hadhrat Abu Huraira (Radhiyallahu Anhu) narrates that Rasullullah (Sallallahu Alaihi Wassalam) forbade a transaction which involves some uncertainty (or cheating) and a transaction determined by throwing stones. (Tirmidhi)  

Accordingly,

1)    If a medical aid or hospital plan is based on conventional insurance, it will not be permissible. 

2)    In principle, it is not permissible to take out a non-Shariah compliant retirement annuity. However, in the event the government demands undue and exorbitant taxes, as in the enquired scenario, then only one will it be excused to take out the retirement annuity to merely mitigate the exorbitant taxes.

In that instance, the surplus funds after paying taxes besides the premiums paid must be given in Sadaqah and charity. The premiums paid will form part of one’s estate.  

3)    It will not be permissible to take a riot fund or conventional insurance. Consider alternate means of security and mitigating losses.And Allah Ta’āla Knows Best

Mahmood Suliman

Student Darul Iftaa

Gaborone, Botswana

Checked and Approved by,

Mufti Ebrahim Desai.