Some say it contains the element of Maisir (gambling) which has been strictly prohibited in the holy Quran. A gambler bets money in the hope of higher gain. Hence, it is argued that an insured person pays his premium in the hope of getting a higher return, therefore, it is unlawful.

Dr. Mohd. Najatullah Siddiqui refutes this misconception in his book “Insurance in Islamic Economics”, page 10.

An insurance policy does not involve the element of gambling or betting. Mustafa Zarqa maintains that a gambler always hopes for a chance to gain materially and sometimes he gains too. But this gain comes out of somebody’s loss, not out of cooperation and mutual benefit. His winning is always at the cost of somebody’s loss. Further it is to be noted that the wealth lost by the gambler is the right of his family which he ruins. He is not the only loser, but his wife and children too are deprived of their livelihood. It is a fact that the gamblers or betters destroy their own economy as well as their family’s fortune by putting money in lucky draws, lottery schemes, horse racing, cards, cricket or football betting, casinos, etc. In contrast, the parties in an insurance contract are bound together in a spirit of mutual cooperation and goodwill in providing material security for the orphan, widows, other dependents as well as one’s own self against an unexpected future loss, damage or peril. No one is a loser. ”

The difference in the gambling and the insurance
Risk is a common factor both in gambling and insurance. In fact, the risk is like the axis of this planet. The whole world revolves round the axis. There is no life without risk. The risks start from the day one when the mother conceives the child, and it continues throughout the life of that child. Risk is of two types: Natural (which can be covered by insurance, mutual cooperation, etc.) and Artificial (taken in gambling).

Natural risks:
Not everyone dies in daily accident but still many of us die everyday
– anyone of us could be one of them. Not every ship or plane sinks or crashes down, still some of them do. Not every company, shop or venture ends up in bankruptcy, yet some meet a misfortune. Not everyone kills somebody in an accident or commits murder, yet, accidental deaths and murders take place everyday. Anyone of us could be responsible for an accident or accidental murder, as misfortune might strike anyone anytime. Not every business is looted or burnt in the riots but still some businesses become the target of the violence.

Artificial risks:
Not every horse wins the jackpot but money is gambled on every horse. Not every team wins the cup, neither every player scores, still millions of dollars are gambled in the games and sports. Not every ticket carries the lucky number, but still crores of rupees are lost in the lottery tickets. Not everyone comes out from the casino as a winner but everyone goes in with lots of money.

The difference:
• The policy buyer gets safety, security and peace of mind even if no untoward incident takes place. On the other hand, the gambler loses the wealth, time and savings, and eventually gets worries, anxiety, repentance and guilt consciousness.
• There is natural risk in insurance; whereas the risk in gambling is artificial.
• The amount received as insurance claim is his own hard earned income. The money earned in gambling comes from the loss of others.
• The insurance compensation helps the policyholder to rebuild himself or his house or business, etc. but the money gained in the gambling adds to the luxuries and extravagance only.
• Investment in insurance helps in building a country’s infrastructure, In contrast, the investments in gambling weakens the public morale, enriches the casino owners who in return spends the money in destructive expansion of business.
• The insured person renders a service to the society while working and paying the premium as an employee, businessman, manufacturer, architect, scientist, etc. The gambler does not render any service to the society by indulging himself in gambling. Instead, he damages the morale of the society.
• In insurance everyone is a winner. In gambling there are few winners and many losers.
• The old age is like a punishment. As the Prophet Mohammad (pbuh)said: “Even if you get ninety nine pleasures, there is one grief waiting for you, that is old age. The insurance saves the man from becoming a burden in the old age. His wife too gets a pension and maintains the self-esteem. The gambling makes one loose his wealth and in most of the cases people become a burden on others because of losing money.

The reason why the insurance is looked upon as gambling
It seems that the critics of the insurance look at the insured’s indi-vidual benefits, and not the collective benefits for the whole society. If a person buys a policy of 10 lakh Rupees, and no untoward inci-dent takes place, as anticipated in the insurance policy, the insurance company invests the money until the maturity and pays it back with little profit. This looks like gambling. If we look collectively, not every person dies in accidents, but still someone or the other meets the misfortune almost everyday.

The critics of the insurance do not realise that all those who survive until the maturity of the policy, get back nothing except their own premium plus a bonus of those years. But the families of a few policyholders who die during the policy period get the same amount of money which others get only after the maturity of the policy. In other words, the insurance company accumulates the premium from everyone and helps those unfortunate families with the same amount although the dead person has not paid so much. In the same way, the planes or the ships cost millions of dollars. It is true that the premium paid by the thousands of the ships and plane owners accumulates to millions of dollars which could be a big profit for the insurance company but as soon as any plane crashes or ship sinks, the insurance company compensates the loss in millions of dollars to the owner of the ship or the plane. Therefore, logically the insurance is not a gambling but a highly risky venture.