bluecross.ca Cons (from an Islamic Ethical Standpoint)

While Bluecross.ca presents itself as a robust and reliable insurance provider in the Canadian market, its conventional operational model poses significant challenges when viewed through the lens of Islamic financial principles. This isn’t about their service quality or customer support, but rather the fundamental structure of their financial products.

• Involvement in Riba (Interest): The most prominent concern is the inherent involvement of interest in conventional insurance. Insurance companies invest premiums in interest-bearing assets to generate returns. This practice of engaging with interest, whether in giving or receiving, is strictly prohibited in Islam. For Muslims, this makes conventional insurance an impermissible transaction, irrespective of the perceived benefits or necessity.
• Gharar (Excessive Uncertainty): Conventional insurance contracts contain a high degree of uncertainty regarding both the occurrence of a future event and the precise value of compensation. This excessive uncertainty or ambiguity in a contract (gharar) is forbidden in Islamic commercial transactions. Islamic contracts emphasize clarity, transparency, and certainty to avoid disputes and exploitation.
• Gambling-like Element: Some Islamic scholars view conventional insurance as having an element similar to gambling (maysir). This is because a policyholder pays premiums and may or may not receive a payout, depending on an uncertain future event. If no event occurs, the premiums are ‘lost.’ This speculative nature, where one party gains at the potential loss of another in an uncertain scenario, is not permissible.
• Lack of Mutual Cooperation: Conventional insurance is primarily a commercial contract where the insurance company aims to profit from the premiums. This differs from the Islamic concept of mutual cooperation and solidarity found in Takaful, where participants contribute to a common fund with the intention of mutual help, not commercial gain for the fund manager (who acts as an administrator).
• Ethical Investment Concerns: While Bluecross.ca doesn’t detail its investment portfolio on the homepage, conventional insurers typically invest in a broad range of assets, which may include industries or practices not considered ethical in Islam (e.g., alcohol, gambling, conventional banking with interest). For a Muslim, even indirect support for such industries through investment is a concern.

Why Conventional Insurance Is Not Recommended in Islam

The prohibition of riba and gharar is foundational in Islamic finance, aimed at fostering economic justice, transparency, and stability. Riba is seen as an exploitative practice that concentrates wealth and creates inequality, while gharar introduces undue risk and potential for disputes.

• Justice and Fairness: Islam promotes fair and transparent dealings. The uncertainty and interest elements in conventional insurance can lead to perceived unfairness, especially when premiums are paid for years without a claim, or when claims are denied based on contract technicalities.
• Risk Sharing vs. Risk Transfer: Islamic finance encourages risk sharing, as seen in Takaful, where participants genuinely share each other’s risks. Conventional insurance, conversely, involves risk transfer to a profit-oriented entity, which fundamentally changes the nature of the transaction.
• Purpose of Wealth: In Islam, wealth is a trust from Allah, to be acquired and used in permissible ways. Engaging in transactions involving riba or gharar contradicts this principle, even if the intention is to secure one’s future. The means by which security is sought must also be permissible.