Q. Before his death, my father gave one house to my mother as her dowry, or meher. She has two sons and three daughters. She has converted this house into six flats and wants to give a flat to each one of her five children and keep one for herself. She wishes to gift her flat as an endowment, or waqf after her death. My brothers are fighting with her on account of this division of her house saying that it is incorrect. Does my mother have a right to decide on how she handles this issue?
Mrs. Ali Ahmad
A. Your mother has done it all in the right way. Your brothers are absolutely wrong and they have no say in how their mother disposes of her property. To start with, the house is your mother’s own property and no one else has any claim to it as long as she is alive. This is due to the fact that a dowry is the wife’s own property. No one else has any claim to it.
Most probably your brothers are objecting to the division because they take the shares of inheritance into consideration, when a daughter receives one share compared to her brother who receives two shares. But your mother is giving a gift now, in her lifetime. When parents give their children gifts, they should maintain absolute justice between them, giving a girl as much as they give a boy. I have often quoted the Hadith which mentions that a companion of the Prophet (peace be upon him) once came and said to him: “Messenger of God, I have given this son of mine a slave and I would like you to witness that.” The Prophet asked him whether he had given everyone of his children a similar gift. When the man answered in the negative, the Prophet refused to be a witness, saying: “Seek some other witness, for I do not witness what is unjust.” Needless to say, what is unjust is forbidden. The Prophet also says: “Fear God and maintain justice between your children.” It is clear from these Hadiths that there should be no discrimination between one’s children in a parent’s gifts.
This means that when your mother decided to give a flat to each one of her sons and daughters, she was absolutely right. Your brothers’ objections are invalid. They must stop such objections.
As for the endowment, it depends on whether the flat will be less than, or equal to, one-third of your mother’s property at the point of her death. If it is so, then there is no problem with making such a will. If it is more than one-third of her property, which is likely after she would have given away her five flats, then she should have the agreement of her children. She may obtain it now, but they will have to confirm it after her death. Therefore, the way out for your mother is to make all this arrangement at the same time and have it all documented and registered with the authorities. She could make an agreement with all her five children that in return for receiving their flats, they forfeit any claim to the remaining sixth flat and agree to its becoming an endowment.
Insurance and Fixed Returns
Q. A life insurance policy offers fixed returns on part of its investment, as this investment is placed in government bonds. Could you please explain whether such a policy is permissible or not.
M. Adil
A. Insurance is permissible, as I have explained several times, although some scholars still pronounce a verdict of prohibition on it. Insurance is an agreement for compensation in case of loss. The compensation is paid from the premiums of the clients, who by taking their policies have all agreed to compensate any one of them who incurs such a loss. Thus, it is a cooperative agreement to indemnify those of their numbers who meet a specified misfortune. Some scholars point out that insurance involves something that cannot be quantified, which is referred to in Islamic law as gharar, and such deals are forbidden in Islam because they make one party unclear about what he gets out of the deal. However, the late scholar Mustafa Al-Zarqa discusses this at length in a book he devoted to insurance and concludes that the gharar involved in insurance is the very element and does not affect the validity of the deal.
Needless to say, an insurance company will not prosper unless it invests its income in some profitable projects. Normally, such companies look for investments that guarantee returns. If they were to invest in high-risk funds, they may find themselves faced with the double problem of their investment incurring a loss and a large number of claims that may arise of some disaster like floods, earthquake, etc. If their investment is a low-risk one and guarantees modest returns, it is all the better. Hence, they invest in a fund like government bonds.
Governments may need cash because they have high expenditure projects, such as building roads, hospitals, or other public services. A government does not undertake business, but its projects and services are important to the community. Government income is made of taxes and fees charged on services. It is a totally different source of income than that made by businessmen. Hence, the returns given by a government on its bonds are not a proportion of profits. Therefore, it has to specify how much it will give on its funds. We cannot think of a government bond in the same terms as a usurious loan through which the usurer exploits the borrower’s need in order to extract heavy profits. Nothing of this is involved here.
On the other hand, the fact that the returns are fixed does not make the policy unlawful. In fact, fixing returns may often be advantageous to the weaker party, which in this case is the policyholder. What we should remember is that Islam looks to what serves the community without exploiting its weaker members. What brings benefit to the community and individuals is lawful, and what brings harm is forbidden. Usury is forbidden because it brings much harm, while trade is lawful because it brings benefit and profit.
To sum up, the policy you are asking about cannot be considered unlawful on the basis of what you have mentioned. If it does not involve anything else that may be unlawful, then it is lawful to take out.