There are no fully-fledged takaful (Islamic insurance) products currently available in Singapore, and the authorities have left it open for the market to handle this matter.
Having said that, we believe that they (Malay Muslim groups who sell insurance in Singapore) are doing a noteworthy service for the Singaporean Malay/Muslim community by raising awareness to their best ability and knowledge concerning the importance of personal finance matters.
However, we view promoting conventional personal finance and/or conventional insurance in the absence of Islamic product alternatives should be exercised with great caution. This is because while our shariah recognizes the needs of individuals and society, it also sets fundamental principles to which we hold fast in navigating specific issues.
One of these fundamental principles is that “necessity is determined according to its degree (extent).” The classic analogy for the fundamental principle is the situation whereby a person dying from starvation may consume pork in the absence of any other halal food. However, the caveat is that it may be consumed to the extent necessary to avoid dying at that time.
Therefore, by applying this fundamental principle to our discussion, it is advisable for Muslims to opt for Islamic products whenever available, including matters related to insurance. Besides, in reference to a fatwa by Dr Akram Laldin, which was obtained by Financial Alliance Islamic Wealth Advisory (FAiWA) relevant to this matter, it is advisable for us to opt for the term and investment-linked policy (ILPs) with Shariah-compliant funds.
All in all, we hope more and more Malay Muslim groups who sell insurance can do their best to abstain from promoting non-shariah-compliant funds to the public when halal options are available in the Singapore market.
As our Prophet (peace be upon him) said: “Leave what makes you in doubt for what does not make you in doubt. Truth is tranquillity, but falsehood is doubt.” (Jami` at-Tirmidhi, hadith no. 2555)
For further reading, you can read our full thoughts on Malay Muslim insurance groups who promote “Muslim friendly” investment on our website titled: Muslim Friendly X Shariah Compliance.
