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This consists of risks involving heavy charges from objects of insurance, and differs according to the times and social conditions. Among the Arabs of the Prophet’s time, daily ailments were unknown and the cost of medical care was practically nothing. The average man built his house and paid for almost none of the material. Thus it is easy to understand why one did not need fire, health, and other types of insurance. However, insurance against captivity and assassination was a real need. The Prophet’s contemporaries were aware of this and so desired certain flexible dispositions that could be modified and adapted to different circumstances when necessary.

For example, in the Constitution of Madina, which was formulated during the first year of the Islamic era, this insurance is called ma’aqil and worked as follows. If someone became a prisoner of war, paying a ransom could procure his freedom. Similarly, all bodily torts or culpable homicides required the payment of damages or blood money. The person concerned often could not afford the sum demanded. Thus, the Prophet organized an insurance system on the basis of mutuality. A tribe’s members could count on the tribe’s central treasury, to which everybody contributed according to his means. If the treasury proved inadequate, other related or neighboring tribes had to help. Thus a hierarchy was established for organizing the units into a complete whole. At Madina, the Ansar tribes were well known. The Prophet ordered the Makkan refugees in Madina to form their own “tribe,” even though they belonged to different Makkan or regional tribes, or were Abyssinians, in order to provide social insurance.

Under Caliph ‘Umar, the branches of insurance were organized according to which professional, civil, or military administration one belonged (or even of regions). Whenever needed, the central or provincial government helped those branches, as we described above when speaking of state expenditure.
Insurance signifies the spreading of one individual’s burden among as many people as possible in order to lighten each person’s burden. Unlike modern capitalistic insurance companies, Islam organized insurance on the basis of mutuality and cooperation, aided by a pyramidal gradation of the branches that culminated in the central government.

Such a branch could engage in commerce with the help of the unutilized funds at its disposal, so that the capital would be augmented. A time might come when a branch’s members could be exempted from paying further contributions or might even receive some of the profits of commerce. Such elements of mutual aid could insure against risk (e.g., traffic accidents, fire, and loss in transit). Also, the insurance industry can be nationalized in order to deal with certain risks (e.g., such temporary motives as dispatching parcels).
Without entering into technical details, Islam does not tolerate the capitalist version of insurance, for the insured person does not participate in the company’s benefits in proportion to his or her contributions, which makes it resemble a game of chance.


Senturk, Omer Faruk. “Charity in Islam” Tughra Books Press. January 2007.