Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.  (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Assalamalaikum

Is insurance (both life and non-life) halaal? if so please give details. If not, please explain why not.

jazakumullah

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Answer:

Is insurance legal?

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol, no person, no grave, no prophet, no imam, no dai, nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

It is not the concept of insurance per se which is illegal in Islam, but rather what is ‘haraam’ and forbidden in Islam is the ‘interest-based’ aspect which is utilized by the conventional insurance companies during their transactions when conducting the insurance business.

Almost all the conventional insurance companies transact their business based on interest, and it is this interest aspect which is deemed absolutely haraam in Islam. But Alhamdolillah, today there are several Islamic Insurance Institutions which provide insurance cover on various aspects based on Shariah principles, and there is absolutely no harm in seeking insurance from such ‘interest-free’ institutions.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me. Allah Alone Knows Best and He is the Only Source of Strength.

Your Brother in Islam,

Burhan