Personal Finance

Life Insurance: is it haram or halal?

In my previous article “Is insurance haram or halal?” (video above too), I discussed some of the main arguments for why insurance should be considered permissible from a Shari’ perspective. However, at the end of the article I promised a follow-up article on life insurance as I noted that it is a different beast to your standard insurance that protects against loss, and as such requires further research.

Well here it is.

In brief, there are two kinds of life insurance. One is best understood as simply another of instance of the standard protective insurance, while the other is best characterised as an investment vehicle. The former is consequently permissible (according to all the same arguments made in the previous article), while the latter is only permissible if the underlying investments are permissible.

Types of life insurance

There are many permutations and variable types of life policies, but fundamentally they all fall into one of the two areas below.

  1. Term insurance

Term insurance is a protective insurance that pays out to your dependents in case you die within a certain period. So, let’s say you are 25 and you purchase a policy costing £10 a month which promises to pay out your dependents £100,000 in case you die before the age of 50. Now what happens is:

a) Either you die before the age of 50 and your family gets £100,000; or

b) You survive past 50 and the policy simply ends. The insurance company simply keeps the £3000 you’ve paid in until then – just like the insurer keeps your car insurance premium each year.

  1. Whole life insurance

Whole life insurance is a mixture of protective insurance and an investment vehicle. Again, let’s say you take out a policy at the age of 25 for £100 a month and it is set to pay out a minimum of £35,000 at the age of 50. If you die before the age of 50 then it pays out £35,000 to your dependents. But you would hope that you don’t die and the underlying investments do well and you get paid out £50,000+ by the time you’re 50.

While you’re here and thinking about planning your finances after you pass away for your loved ones, you should also think about sorting out your Islamic will. On average people misplace assets or lose through tax inefficiency up to £9700 when they die without a will. On top of that as a Muslim having a will is super important so that your inheritance is separated up the Islamic way. So if you’re a UK resident, then please do check out IFG Wills and get your Islamic will sorted within 30 minutes.

The Islamic perspective: term life insurance

This kind of insurance is very much equivalent to all the other kinds of protective insurance that were discussed in the previous article. The same arguments apply, namely:

  1. The kind of gharar that is being forbidden in the ahadith is not the kind of gharar involved in modern insurance;
  2. The many positives of insurance outweigh the negatives; and
  3. if we accept takaful as Shariah-compliant, then we must accept conventional insurance as Shariah-compliant as there is little substantive difference between the two.

There may however be a few unique objections to life insurance in particular which cannot be levelled against other kinds of insurance, so let’s test if they’re compelling.

Arguments against life insurance in particular

The first one is that, unlike other kinds of insurance, life insurance seeks to insure against loss of life and the sustenance of one’s family after one’s death.

The nusus (scriptures) say:

When Ibrahim said: My Lord is He who gives life and causes to die [2:258]

And He is the one who gave you life; then He causes you to die and then will [again] give you life. [22:66]

There is not a single moving creature on the earth but Allah is responsible for providing its sustenance. [6:11]

Do not kill your children for fear of poverty. We will give sustenance to all of you. To kill them is certainly a great sin. [17:31]

“Umar said, “I heard the Messenger of Allah, may Allah bless him and grant him peace, say, ‘If you were to rely on Allah as He should be relied on, He would provide for you as He provides for the birds. They go out early in the morning hungry and return in the evening full.’” [Tirmidhi]

The argument goes that by taking out life insurance one is encroaching on the domain of Allah. Allah has specifically mentioned life and sustenance as two categories we shouldn’t worry about – that is in the hands of Allah.

But this argument is so weak I fear I’ve drafted it as a strawman. There are two obvious responses to it: (1) Allah says he is in charge of life and death and providing sustenance, but he doesn’t want us all to kick back and chill out, or take no precautions whatsoever. The nusus also say:

“do not throw [yourselves] with your [own] hands into destruction…” [2:195]

Anas ibn Malik reported: A man from the Ansar came to the Prophet, peace and blessings be upon him, and begged from him. The Prophet said, “Have you nothing in your house?” The man said, “Yes, a piece of cloth, a part of which we wear and a part of which we spread on the ground, and a wooden bowl from which we drink water.” The Prophet said, “Bring them to me.” The man brought these articles to him and the Prophet took them in his hands and he said, “Who will buy these?” Someone said, “I will buy them for one coin.” The Prophet said twice or thrice, “Who will offer more than one coin?” Someone said, “I will buy them for two coins.” He sold them for two coins and the Prophet said, “Buy food with one of them and give it to your family. Buy an axe and bring it to me.” The man brought it to him. The Prophet fixed a handle on it with his own hands and he said, “Go gather firewood and sell it, and do not let me see you for a fortnight.” The man went away and gathered firewood and sold it. When he had earned ten coins, he came and bought a garment and food. The Prophet said, “This is better for you than for begging to come as a blemish on your face on the Day of Resurrection. Begging is appropriate only for three people: one in severe poverty, one in severe debt, and one who must pay a difficult compensation.” [Abu Dawud]

The Prophet also said “”It is the duty of a Muslim who has anything to bequest not to let two nights pass without writing a will about it” (Sahih al-Bukhari)”. Again, Islam teaches us to take all necessary precautions for looking after our family even after we die. In fact Islam forbids one from bequeathing more than 1/3 of the inheritance to other than the set people who are the deceased’s immediate family.

Argument (2) against this objection is that by the same token all the other kinds of protective insurance would also be impermissible as Allah is also the Shafi “Healer” and Haafiz “Protector”. So one shouldn’t take out medical insurance – in fact, by the same reasoning, one shouldn’t go to the hospital or take medicine.

Another objection to the permissibility of life insurance could be that Allah is the owner of life and death – and as such we are not Islamically permitted to trade using it. Again there are two straightforward responses: (1) in life insurance we are not buying and selling our lives, we are mitigating the risk of loss of life; and, if I’m wrong about (1), (2) Allah says in the Qur’an:

“Indeed, Allah has purchased from the believers their lives and their properties [in exchange] for that they will have Paradise.” [9:111]

Clearly we do have a degree of ownership over our lives and what we do with it. To that extent we are allowed to use our lives and bodies in the way we choose to.

I would be interested to hear further arguments from you (in the comments below) if you think I’ve missed any major objections to life insurance.

The Islamic perspective: whole life insurance

Fundamentally there is not a problem with whole life insurance – but in reality there will be for most people living in the West. This is because this type of insurance is best characterised as an investment and the permissibility of the investment depends on the underlying assets which are invested in.

In the Middle East this is not a problem if you opt to go with a takaful operator who will be restricted by their internal policies to invest only in halal assets.

In the UK however it is a bit trickier as standard insurers will almost certainly put large amounts of the policy amount into fixed-income (interest-based) products.

But all may not yet be lost. There are potentially two ways to go about dealing with this: (1) either one gets a policy where one can dictate what underlying investments the policy is invested in (and then opt for all Shariah-compliant assets; or (2) one chooses a policy where the underlying assets are largely Shariah-compliant, and then gives away as charity the portion that is not. I am not a huge fan of this latter option as whole life insurance certainly isn’t as necessary as a pension, say, can be. So one can quite easily just choose to invest in the whole range of other Shariah-compliant investment products available instead.


I think the above arguments are fairly clear so I won’t repeat myself here. In short, if you are considering life insurance, see if it is term insurance or whole life insurance. If term insurance, my view is that it is fine. If whole life insurance, my view is that it is also fine if you can control the investments being sharia-compliant. In practice that is likely to be difficult in the West.

What I will also do is flag up two areas that I feel like we at IFG should explore more closely in the coming months:

  1. Genuinely, what are the various long-term Shariah-compliant investment options out there. To this end we will shortly inshAllah be embarking on a series of reviews of the various companies/funds/start-ups who put themselves out as Shariah-compliant (if you want to contact us with entities we should review, please do); and [UPDATE: we have now done this. See our halal investment comparison here.]
  2. Just how good is the argument of “purifying” the haram earning out from an investment and keeping the rest? Isn’t that a bit of a cop-out?

I look forward to your comments as ever!

Please remember to subscribe to our email list (blue box up top). Please also check out IFG Wills – and get your Islamic duty of having a will sorted out within 30 minutes online.


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41 Comments. Leave new

  • The reluctance that I am having in buying insurance is that the insurance companies invest the premiums in interest based businesses which are not allowed. If there are any that strictly abide by Islamic rules of investment, please share the info on them.

  • Life Insurance is defined as “A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured.”[1]

    Life Insurance is not permissible for the following three reasons:

    1. Qimaar (gambling): The Life Insurance Company might receive more than the insured monies or might not receive any amount of money. This is the same as gambling. If the insured person is afflicted with any loss or damage to insured properties worth millions, he might receive more than what he has paid for or might receive less. This is exactly how gambling works.

    2. Riba (Interest): If the Insurance Company receives premiums worth more than the insured amount, then that will be usury and interest. If there is any loss to the insured person’s property and the loss is worth much lesser than the total premiums that he has paid to the insurance company, such a person would be guilty of undertaking a usurious and interest based transaction.

    3. Gharar (Future Uncertainty): There is no certainty when the insured person will die. Therefore the insurance contract is based on an uncertain future event, i.e. death of the insured person. Rasullullah (Sallallahu Alayhi Sallam) prohibited any transaction which has the element of Gharar.

    • Very well explained with an organized answer (3 bullet points). I will be saving your answer for future reference. It touches the true haram realm of life insurance.

      However, if someone is in a country where it is mandatory for them buy insurance, then they are excused as this is a hardship that is beyond their control. They must buy it with great hate and detest.

      Optional or recommended insurance should not be bought any case. Never! It’s tempting, but once you buy it, you have went against Allah and this leads to other sins. Be the better person and make the smart decision to not buy insurance, even if that is hard for you living without it. It is better to live in hardship rather in sin.

    • At the risk of sounding flippant, those that say Rizq is written and fixed, does that not then mean we should kick back and relax and not go to work as Allah SWT will provide for us?? The default answer for a lot of Muslims is that it is the “will” of Allah, and nothing happens without the will of Allah, nothing happens without the command of Allah. I see and hear that a lot in our community. So, would that not mean if one was to stand in the middle of a busy road and get knocked over and killed the that was the will of Allah? That’s what Allah wanted for that individual? If one is to do something wrong, then do we put that on Allah too as nothing happens without the will and command of Allah? I do think we don’t know how to interpret these things properly. I don’t know the answer myself, and I’m not saying for one second that life insurance is halal, I like many, am confused, and don’t know what to believe as there are conflicting views and opinions as to whether it is halal or haram. You will find one scholar saying it’s allowed and another saying it’s not. Allah knows best.

    • A bit late, but on point “3”, death is a certainty for everyone

  • Sustenance is hard especially in our countries of mixed can we be helped

    August 16, 2018 7:59 pm


    All types of insurance are Haram (prohibited). They involve Jahalah (sale with lack of knowledge), Gharar (fraudulent transaction where details about the sold item are unknown or uncertain) – both of them are not pardoned – gambling, unjustly taking people’s money, and Riba (usury/interest). There are many legal proofs that all these transactions are forbidden. Allah (Exalted be He) says:

    And eat up not one another’s property unjustly (in any illegal way e.g. stealing, robbing, deceiving, etc.) [Surat Al-Baqarah 2:188]


    Shaitân (Satan) wants only to excite enmity and hatred between you with intoxicants (alcoholic drinks) and gambling, and hinder you from the remembrance of Allâh and from As-Salât (the prayer). So, will you not then abstain? [Surat Al-Mai’dah 5:91]

    Moreover, the Prophet (peace be upon him) forbade Gharar sale [Muslim, Book on transactions, No. 1513].

    Source: Insurance

    Al-Gharar is something that involves uncertainty, risk or speculation.

    Narrated by Abu Hurayrah (may Allaah be pleased with him):

    “The Messenger of Allaah (peace and blessings of Allaah be upon him) forbade transactions determined by throwing a stone and transactions which involved some uncertainty.” (Narrated by Muslim).


    Shaykh ‘Abd-Allaah ibn Jibreen was asked what if the commercial insurance is compulsory and cannot be avoided.

    He said:

    If insurance is compulsory and cannot be avoided, the one who is forced to buy it is excused. But if it is not compulsory then it is not permissible to buy it, so long as it is a type of commercial insurance, because it is a kind of gambling which is forbidden.

    Hope that you will try to understand.

    • jzkallah khayr for the input brother. I believe I have adequately explained my position on the points raised above. I appreciate that this is a sincerely held alternative view for you.

      • Assalamualaikum. Whilst you are welcome to have your view and the guy who opposed your view is welcome to have his, as a growing business where muslims who are not as critical thinkers as you are turning to for help, you should also detail the opposing view too. You missed fundamental opposing views in this debate e.g gambling and glossed over the uncertainty aspect which can be seen as disingenuous.

    • When I take the license, I study for the test. In chapter 1, it specifically said that insurance does not cover speculative risk, a type of risk that could involve gain. What does that mean? Gambling is not covered by insurance. That means, insurance has nothing to do with gambling.

      As for Jahalah or Gharar, in order to sell life insurance in USA, you need to be licensed. It is strictly forbidden by law to solicitate the products without properly and fully licensed. With that said, the agent must be fully educated and knowledgeable about the product they are selling. Without proper education, they will not pass their license examination.

      As for Riba, let’s be honest. If we take this too literally, that interest rate is forbidden, then no Islamic people can grow their money. Owning business is forbidden because it involves using your money to gain more money (interest). Bank is forbidden too. Owning a property is forbidden because it can grow in value. There will be a lot of forbidden things and by the end of many generations, they will have nothing to pass down to their next generation because they’re all broke.

  • Dear brothers, Assalalamualaikum wa Rahmatullah wa barakaat. As a Muslim living in Canada I am also challenged by family protection issues living in the West where we do not have an Islamic Bait ul maal to which we could contribute and which could take care of adequate family needs in the event of death or other calamities. The Insurance business is so meticulously regulated here and so scientifically and statistically operated that it leaves little or no room for speculation. The contracts , whether for term insurance or Universal Life Insurance are very clear and precise and it is a contract where both parties agree on a business partnership, meaning, the insured agrees to pay a premium at clearly defined rate for a defined length of time and the Insurer agrees to pay in the event of a calamity an agreed sum of money to the benficiary (ies). These contracts are validated by the country’s legislation, at the risk of seeing the insurance company being penalised, as a protection for the client or insured. If this is a clear well defined contract, I would honestly like to see where the element of uncertainty is, especially given that I have never heard of any default or malpractice by any insurance company. In my opinion the argument that we should leave questions of life and death and sustenance in the Hands of Allah SWT is wrongly interpreted. True it is Allah SWT who holds sovereign control of these things but why do we have to work? Why do we eat? Why do we take medicines when we are ill? Is taking medicines a certainty or a probability? Someone may take medicine but still die. Yet that person engaged in an activity that involved an element of gharar or uncertainty. He gambled his life by putting his trust in the medication.
    But he lost. Why did the Prophet saw ask that man to invest by selling his piece of cloth and use half of it for his family and invest the other half in business? When a sales person invests in buying articles with an idea of selling them and make a profit, is he sure and certain that he will actually sell his articles and make that profit? Is this speculation or no? A man is responsible for providing for his family as well as for its well being and in the absence of an Islamic Bait ul maal to which he would contribute and that would take care of his family after his death I still do not see why getting into a contract with a business that does not involve any haram like interest or gambling, would be haram as long as a clear, transparent and duly registered contract is signed between both parties. Doing businesses with non islamic entities are clearly allowed in Islam, as far as I understand as long as they do not involve any haram elements. Today Muslims are in this dilemma because the Ummah does not have a Rightly guarded Khalifah based upon the method of prophethood to take care of and regulate the affairs of the Ummah. But this may be another topic of discussion in itself. With all respect due, Jazaak Allah for reading and responding.

    • I very much align with this narrative. To buttress your point, during hajj some say you can’t go for hajj if you have a loan you have not paid off. Loans like mortgage or cars on HP. Then some say if you have a contract in place which you pa premium you can go on hajj. In the same breadth, you give zakat to the poor and he goes to take drugs or alcohol with it without your knowledge. Are you then responsible for his action? These are all behind the scene. What If the Islamic bank where you bank decides to engage in business with your money that you believe is haram but they believe is halal for which you have no knowledge of. So if the insurance company engage in haram behind the scene how would you know? This also is behind the scene and plays no part in your contract with them. May Allah forgive us where we’ve have heired.

  • “The argument goes that by taking out life insurance one is encroaching on the domain of Allah. Allah has specifically mentioned life and sustenance as two categories we shouldn’t worry about – that is in the hands of Allah.”

    Why is it so hard for people or Scholars to understand the above statement??? This has nothing to do with earnings, savings, finance, health or insurance.

    Yes indeed Allah swt is the creator and provider. Yes he gave us life and provided food as he did to animals too. THAT DOESNT MEAN BUYING A LIFE INSURANCE IS LIKE BUYING AN “EXTENSION TO YOUR LIFE”.

    I was talking to the owner of Auto Insurance agency. This is exactly what he told me. NO, Life is in the hands of Allah swt. We cannot buy life. He is Such an ignorant under qualified person I have ever met.

    Note: the only problem with any financial institutions is it’s “INVESTMENTS”.
    Bank accounts
    Auto insurance
    Life insurance
    Health insurance

    Even the people who donated to Islamic institutions. Ex: A Muslim millionaire runs a Dialysis Clinics He ripoff sick people… How his money Halal. How is it a halal contribution to the Mosque.

    Why can’t these Scholars stretch the issues like a rubber band. Why can’t they simplify the answers.

    Haram: any investments based on % interest on your premium is Haram.
    But the same % if it is based on the “market value” of your investments is Halal. Cause there’s a risk of profit and loss.

    Term life insurance with no cash value is Halal
    ROP. Return of premium is Halal
    IUL. Index Universal Life Insurance is Halal cause the insurance companies offer Market Value (based on the Investment) on your premiums.

    • Yehia Salem yet
      June 21, 2019 5:48 am

      I agree with you . In the sane time I can’t say Fatwa but I advice all of us as Muslim to take care of the primary staff we need to present as Muslim as to be cooperative to have our pray in time to be honest to stop Liying to work hard as to prove to all the other people how the Islam Is great and how Muslim is good religion in simple words to present our religion in our acts and dealing with others . That’s much better than just debating in staff all of us understand that life is running very fast and very hard to judge about halal in insurance or haram as we all live in foreign countries where every one responsible for a family and no one cover you after Allah so we have to take care and protect our family.

  • Raihaan Nawaz
    August 14, 2019 2:59 pm

    This is all Bull Shit. Insurance is a basically a new concept about 150 YEARS old. Don’t tell me that the rules were formed over 400 years ago. This are the reasons why our community is getting a bad reputation for fucking people like you. The other day some one mentioned toilet rolls are Haram. You bloody double standards. The Saudi Prince sleeps with 10 girls. Is that not Haram?

    • We are sorry you feel that way. Though you’ll find we actually take the minority position that says life insurance is permissible, which would undermine your argument, predicated as it is on the assumption that we’re very conservative and deem everything haram.

  • Its amazing that in day and age everything is haram and no muslims scholars provide us with solutions but all provide us for reasons that make everything haram. Islam is a progressive religion which from inception looked to solve everyday problems. Life insurance is a real problem. Providing for people after ones death is a real problem…dont just say haram GIVE US A SLLUTION.

  • Its amazing that in this day and age everything is haram and no muslims scholars provide us with solutions but all provide us for reasons that make everything haram. Islam is a progressive religion which from inception looked to solve everyday problems. Life insurance is a real problem. Providing for people after ones death is a real problem…dont just say haram GIVE US A SOLUTION. All those that are saying the article is wrong tell me what to do. Practucle not waffle please. No leave to Allah. We all do that.

  • Very insightful and beneficial article Ibrahim, thanks again on shedding light on a topic which is very pertinent for most and we muslims need solutions to, especially in the west.

  • Abdul Suleiman
    November 29, 2019 1:26 pm

    I am personally very confused as to what the truth is on dealing with the different topics pertaining to investments, trade ,profit, insurance ,wills ,etc ,in the true Islamic way .I have read and noted the several different contradicting and confusing responses by some people claiming to be Islamic scholars may be they are quoting Quranic implications and not giving the average muslim who are counting on these scholars simple straight forward answers to these issues for them to easly understand in a simple and clear explanation instead of subjecting them to go do their own research . those of us living in the west have a suggestion for them and a humble request ,can they let they tell us exactly how those traditional Islamic countries deal with these issues, and if they cant applied or implemented exactly the same way they are in those countries what is the best alternative ? of course not ruling out Islamic Guidance.

  • Asalam Aleikum.
    Very insightful article manshaAllah may all guide and protect you and your family.

    Haram and Halal the key words here.
    Riba (Interest), Qimaar (Gambling) and Gharar (Future Uncertainty) the Trojans and all deadly and Haram however pretty or twisted we present or sugar coat them(They will never be halal ). May Allah guide us all to the best and right path amin.

    The argument of Opting for Halal Investment to Eliminate Riba is Plausible and can be managed in many scenarios like investment of Choice which is Halal or opt out of Receiving or forfeit any Interest altogether. So no trading with money for money.

    Very compelling argument of industry Maturity on Eliminating Gharar and Qimaar Scientifically and statistically which is plausible
    (However only Allah(swt) Knows the hour) all the rest are assumptions and most time wrong when it comes to the heart and soul matters. Just donate to the masjid construction and build yourself a home in Janna. After you are buried they all forget you in less than a year or way less and will only have memories.Interest free Savings and Education trust funds could be very responsible (this too another sticky subject for another day) Brick and Mortar Asset or like is safe.
    On the day of Judgement your will not even remember your family as each soul will be accounting individually. So you will not have the chance to ask if they were okay after you left. What are the possibilities when you pass away and the family life will continue and even better than before ? How many families have you seen get wealthier after the parents(Bread winner) pass away and the Kids building mosques and charities for their parents? Very many ? This is because their sustenance is fixed and from Allah. What is the possibility the income (which is fixed) you are today all enjoying is for one of the kids or other partners? e.g my lifetime rizk prescribed by Allah (sw) is £300k, partner £ 1.9mill,
    Child £ 20 mill and as of today am ridding on the two. So my death is not significant to their livelihood apart from my presence they will still have their rizk.(My thoughts and again could this thought also be classified as Gharar:)
    But again see below:

    Another very important idea to understand is that rizq is fixed in its amount. Ibn Mas’ud narrated that Allah’s Messenger (ﷺ) said to his wife Umm Habiba:

    Verily you have asked Allah about the duration of life already set, and the steps you would take, and the sustenance the share of which is fixed. Nothing will take place before its due time, and nothing will be deferred beyond when it is due [Muslim].


    Allah increases the provision (rizq) for whom he wills, and straitens (it from whom He wills), and they rejoice in the life of the world, whereas the life of this world as compared with the hereafter is but a brief passing enjoyment [TMQ Ar-Ra’d: 26].

    I also agree most Takaful covers are Conventional and flawed(Specific regions). I burnt my fingers on a commercial cover. Nothing Islamic or Halal on what I was given I actually lost. (I forgave them)

    Am still sitting on the fence on this one and the Neys are more convincing than the Yeys soo far.
    I would love to take a good cover once convinced beyond any reasonable doubt and Halal.

    I hope I get a convincing and clear view soon as sitting on the fence is very painful and is hurting.
    Allah know best.

  • Thaqib Moosa
    March 17, 2020 8:47 am

    I revisited this article recently and found it very simple and informative.

    You mentioned above that insurance is not as essential as a pension, and I was wondering if it is not possible to view the pension as sufficient so a life insurance may not be required (after a point). So for example let’s say a person is 40 and has built up a pension pot of £500,000. My understanding is that most pension schemes have a pay-out to family or next-of-kin if the pension holder dies before withdrawing (do correct me if this is not the case).

    In this case, could we say that financially they are better off just having their pension and putting any extra funds in that instead of having a life insurance policy? Perhaps those who have not built up their pension pot yet can get a fixed term insurance till such a time as they do have the larger pension pot?

    Also, can you do a comparison for which policies we can realistically buy? I know that you guys have a very detailed guide on mortgages and it would be interesting to see something similar on life insurance.

    • Interesting observation and on an initial think I can’t fault it.

      Good idea re a detailed guide on policies you can buy. We’ve historically not been that impressed by any of the policies available and had some quiet aspirations to (at some point when things calm down) work with an insurer to offer a compelling insurance product with the underlying investments in sharia-compliant stocks/funds.

  • Not a Brit. American Muslim. The masjid I attend offer a burial plan. Why don’t we just buy burial plans and leave a will to cover family members when we die. Wouldn’t that eliminate the need for any type of insurance? I’m just saying.

    • Ibrahim Khan
      April 20, 2020 8:00 am

      Salaam brother – I think there are a few other things to consider. The main one is the family home. Typically it might have an outstanding mortgage on it that would mean the house has to be sold if someone can’t continue paying it. With an insurance policy one could cover that off.

  • Salaam brother .. interesting article .. I live in Singapore – a multi racial multi religions multi cultural city .. would it be possible for you to initiate a global Islamic fund or Islamic insurance fund so that the “haram” elements can be eliminated ? Should be not difficult to implement as in today’s business world , moneys are moved every minute by just a click on the mouse..

  • Abdulrahman Ahmed Hegazy
    May 28, 2020 7:39 pm

    the issues that I see in the first example about the term life insurance are how th insurer is going to keep my money if I passed after age of 50 in form of investments that I get paid back or I don’t get anything at all after 50. Secondly, if it happened and died before 50 why am I going to receive 100,000 while I paid only 3,0000 or even less than that. the right way of insurers to work is by Takaful system for insurance consumers.

  • Thank you very much brother. This is well explained. Am a Ugandan Moslem. We do not have Islamic Banking in the country and wish to take INSURED salary loan and an interest rate of 8%. In an unexpected crisis, related to loss of employment or death, Insurance can cover my loan.

    Is this Halala?

  • Mammie Brandolino
    September 11, 2020 6:39 pm

    Can you post more along these lines? It’s been very helpful to people.

  • Are there any scholars that back this view? Apologies if I missed it.

  • Salam alaykum,
    Really informative article.
    What is your view on a person selling any type of life insurance wether it be to Muslims or non Muslims?
    Warm Regards

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  • Is it education insurance policy is permissible in Islam, if insurance company gives a fixed interest on education policy i.e without any gambling investment by an insurance company.

  • Salaam!

    Thank you for the wonderful article! I am kind of new to investments, so I apologize if this is a dumb question. When you say “In the UK however it is a bit trickier as standard insurers will almost certainly put large amounts of the policy amount into fixed-income (interest-based) products”

    What does “fixed-income (interest-based) products” mean? A few insurance companies have been reaching out to me because I’m young and they say I should invest early, but I’m not sure what to ask or how to phrase the question to find out if my money is going towards “fixed-income (interest-based) products”.

    For the record, I am in the U.S., so I know my halal investment options via mainstream sources is already kinda limited.

  • Salaam. I live in Singapore and am studying to be an insurance agent/financial advisor. Unfortunately, based on what I’ve learnt, the investment component in whole life/endowment (permanent) life insurance policies here cannot be controlled by the insured. Only ILPs have that function, and since they also do not provide any guaranteed benefits and the gains are purely based on asset performance, I feel it complies with the Syariah Law and is halal as there is no form of riba.

    Is it then haraam for me to sell permanent life insurance to Muslims? Is it also a sin for me to sell haraam products (bonds, etc) to non-Muslims? I hope you can kindly answer my concerns, backed with scholarly commentary. Thank you!

  • Jazakallahu Khayra, Ibrahim

    Note: I tried posting this on your other article on insurance and it didn’t seem to post, so I am posting this over here. Please excuse me if it ends up posting on both.

    I appreciate your efforts and have benefited greatly from your articles and work on IFG. However, I do have a question in regards to your view on insurance. I have read the above article along with your subsequent article on life insurance. I agree with your approach to the gharar aspect in insurance as not all types of gharar make a transaction invalid (as you have also pointed out in examples from ahadith). I also agree there are types of ijaara in which a person is being paid for being available in providing a service (i.e. a security guard or private driver). There are many types of insurance which can generally fall under this type of ijaara (e.g. roadside assistance insurance or even medical insurance in which the insurance company deals directly with the medical provider to ensure you are taken care of) . The issue I have is with those insurances which end with a cash payout. From a fiqhi perspective, what “service” is one paying for in such a case? Also, what would this payout be considered? A tabarru’ or gift from the insurance company?

    In such a case it seems to me that in this transaction money (in the form of premiums) is being given in lieu of money (the payout one receives from the insurance company. As such, would the rules of riba and sarf not be applicable here? In the example of a security guard which you mentioned in your article, there is at least a “service” being made available if the need arises. In the case of cash payouts, there really is no “service” being provided besides just giving cash. This is the case in life insurance and certain types of medical and car insurace.

    I would love to hear your thoughts on this riba aspect and what would be the way around it.

    Jazakallahu Khayra in advance.

  • Would mortgage insurance be permitted according to the above research?

  • I wanted to get your take on Disability Income Insurance, I would assume that based upon the general video on insurance and these comments on life insurance the same general thoughts would apply. Thanks


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