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Why can’t I invest in insurance companies?
“Why don’t you invest in health insurers like Humana?” That’s a question I’ve heard recently. The short answer is that insurers of all types, whether they’re property, life or medical, do not meet the threshold requirements for investment as outlined by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The long answer takes a little more analysis. Here’s a brief explanation. A word about gharar Simply put, Humana and insurance companies of all sorts deal in gharar, or excessive uncertainty. This term generally refers to game of chance or speculation, or any financial transaction or contract (such as
Purifying Impermissible Assets
ABSTRACT Purifying non-halal conventional investments in a savings vehicle like a 401(k) plan and rendering them halal is a difficult subject. This issue is often raised by Shari’ah-sensitive investors who have resolved to make the transition to Halal in their financial affairs. The desire to more fully follow the principles of Islam is in itself commendable and should be considered guidance from God. The purification of assets that are at their base impure is not possible, however, according to the tenets of Islamic Sacred Law. Instead, there are several steps that should be taken to embrace a halal strategy in