Question 130 - The Enlightening Answer Across the Ether, Vol 2

Ahmed al-Hasan Response:

In the name of Allah, the Most Gracious, the Most Merciful. Praise be to Allah, Lord of the worlds, and may Allah send prayers upon Muhammad and the family of Muhammad, the Imams and the Mahdis, and grant them abundant peace. Insurance is a permissible contract between one party, normally an insurance company-the insurer-and another party, normally a person, persons, or company-the insured or policyholder. In it, the insurer undertakes to pay the insured or his heirs a sum of money when a specified event occurs to a specified thing concerning him during a specified period, in return for the insured paying a specified sum of money over a specified period. Issues: 1. The insured must pay the sum required of him under the contract and within the specified period. If he refuses to pay, the insurer may terminate the contract and return half the sum the insured has paid, if he has paid part of the sum required of him. 2. If the insured delays payment, the insurer may either grant him more time or terminate the contract and return half the sum the insured has paid, if he has paid part of the sum required of him. 3. If the insurer stipulates that he will return none of the premium payments made by the insured if the insured breaches the contract or delays payment and the insurer consequently terminates the contract, the condition is valid. 4. The insurer must compensate the insured for his loss when it occurs. The contract is not dissolved by the insurer evading payment; rather, the insurer is compelled to pay. 5. From the outset, the insurer must be capable of compensating the insured for the loss specified in the contract. If it becomes clear after the contract that he was incapable of doing so from the outset, the insured has the right to terminate and recover the money he paid. This also applies if the insurer later becomes capable after having been incapable at the outset. 6. If the insurer becomes incapable after having been capable at the outset, the insured has the right to terminate and recover half the money he paid. 7. If the insurer stipulates that he will not return half the money if he becomes incapable of compensating the loss and the insured chooses to terminate the contract, the condition is invalid. 8. If the insured stipulates that he will recover everything he paid if the insurer becomes incapable, the condition is valid.