We don’t Need Insurance and Takaful (part 1)

Sheikh Yusuf Al Qardawi in his book ‘Economic Security in Islam’ devides economic security system into 3 (three) layers depending upon profiles or characteristics of people.  Each layer contains targeted people of different profiles and problems, so that require different way or approach or tools to deal with them.

The first layer is core family, consists of husband, wife and children.  Husband or father is the head of family and hold full responsibility for his family well-being and wealth.  He is helped by his wife in taking care the family.  
If husband and wife are economically incapable to fulfill family basic needs, their extended family such as brothers and sisters or parents of husband or wife should step in to help them financially or by providing basic needs such as foods, clothes and shelter.  Extended family is the second layer of economic security system.
There may be situation where unfortunately both core and extended families are poor.  In other words, each family within the same big family is financially incapable to secure basic well-being to its own core one, therefore unable to help other core families.  At this point, they begin to need help from outside of the big family.  The immediate external resources that should be available for poor families to access is Zakah.  Zakah is the third layer of social security.  
Zakah has very strict rules on who is responsible to pay, when to pay, how much to pay and most importantly who is eligible to benefit from Zakah money.  Those are eligible to receive Zakah (Mustahik) limited into 8 groups (called hasnaf) only, and the poors (masakiin) is one of them.
Taking care of family (core and extended) and paying Zakah, when criterias met, are obligations imposed on every Muslim. 
In order to have socially and economically strong families and society, these two elements must exist as pre-requisites:
1. Properly and fairly functioning economy that able creating jobs or providing opportunity to earn so that each family will be able to feed and sustain their own.  
2. Recognition to the institution of family as the smallest, core and therefore vital unit of society.  Family needs to be at very center of all policies or efforts by government.  The recognition on family should begin with properly defining family as Allah the only God has guided human i.e. family must be formed by an adult man and an adult woman under marriage approved by religion and government.  Other variations of family, for example same-sex marriage or a couple living together without marriage endorsed by religion, should not be accepted since they will only weaken the society foundation and lead to many social problems, including economic security.  Of course, family headed by single parent but originally formed by legal marriage institution (appoved by religion and government) should fall within definition of family.
On the other hand, to have strong Zakah institution (and other charitable schemes e.g. sadaqah, waqaf, etc), the country or society needs a formal Baitul Maal. It should be government responsibility to ensure baitul maal is in operation in utmost effective and efficient manners.  Not only to ensure that its Muslim citizens performing their religious obligation and avoiding sin, baitul maal must show its significant contribution to public welfare, especially eradication of poverty.  By optimizing collection,  distribution and management of zakah and sadaqah, government will be able to save millions of tax payers money.  They may charge lower tax since social welfare has been taken care by zakah and sadaqah. 
Unfortunately,  here we are now, in almost every part of the World, including Muslim countries, institution of family is under threat and none of even Islamic country really have strong and efficient baitul maal system.  Taxpayers burden is getting heavier.  Corruption just makes things even worse. 
Layer one to three above (core family,  extended family and zakah) are compulsory imposed upon Muslim and they form inner layers of Islamic economic security system.
 
The next layers starting from the fourth, if any, are outer layers and voluntary in nature.  In fact, the fourth layer does exist, they are sadaqah and other charitable activities other than zakah.  
The fifth layer is Waqf.  Some may argue that waqf is part of sadaqah.  However, due to its unique features and relatively sophisticated structure, I am in strong opinion that waqf deserves its own category.  Waqf offers massive potential that is yet to explore and goes beyond solely charitable activities. 
Now, come a million dollar question, where is takaful?  If we have such a strong and efficient inner and outer layers of economic security system, does the World really need takaful or even insurance?

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