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:

assalamualaikum brother, here i want to know your view about life insurance policy.

i live in india and here we have got an insurance system which promises to pay you a fix amount say one lac rupee to your nominee if you die within the insured period for that you have to pay them some amount say five hundred rupees per month, and if you do not die then they will return your money with interest which they call bonus. there is no doubt that interest is haraam and there are clear evidence in quran and sunnah. i have enquired about this issue with some aalims and they have told me that life insurance is haraam, when i told them that i will not take the interest money except the amount which i have given if i do not die they told me that insuring a human being is haraam and it will be considered as not having faith in Allah that he will take care of your loved ones if you die. i told them i have no doubt in ALLAH"S mercy and i also do not believe that if Allah plans misery for my family then no insurance can help to stop the misery. but what is the harm in preparing for a situation which may force my wife and daughter to do things which is not allowed in islam such as going out mixing with men to earn their livelihood specially in a country like india where there is no facility of baitul maal (islamic fund house) for needy. is there any concrete evidence in the light of quran and sunnah forbidding this system although i know many have given reasons and logics but i have not come across anyone who has given me the proof as the proof of interest and alcohol etc. which are clear as daylight. please note that i know that insurance system was not there when quran was being revealed ,but people keep on applying logics and reasons but as you know qiyaas of a person cannot become the law of ALLAH . an opinion of a man can be taken and cannot be taken. there are opions of muslims who say a woman cannot be allowed to drive a car and there are muslims who say a woman can be a fighter plane pilot. it is just there opion . please brother if you can provide some clear evidence not things like "what would they do with your money? they would invest in haraam things,so it is haraam" but we forget that if we go on like this we should all never buy microsoft windows cause what would america do with your money? you know it. can we go in so deep ? if yes then it would create problems for muslims and the kuffars will go on using all the advantages against us. i think we should just stick to quraan and sunnah, and should not stop people from eating a newly discovered animal if it looks like a swine but with no evidence that it is infact a swine, declaring it to be haraam is itself haraam cause ALLAH has not revealed anything about it. brother i m sorry it was like a lecture but please let me know whether i m correct or not , if not then give some proof and inshaALLAH i may change my stand. thank you

assalaamualaikum wa rahmatullahi wa barakatahu

azhar ali khan calcutta

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Answer:

Life insurance

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 none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

Beloved brother in Islam, it is not the concept of insurance per se which is illegal or prohibited 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.

The absolute majority of the scholars are of the opinion that ‘life-insurance’ is impermissible in Islam because unlike other calamities and eventualities which may or may not effect man, death is one thing that is Decreed for every son of Adam by their Lord and Creator, Allah Subhanah.

The scholars and jurists in Islam are of the opinion that non-life insurance policies are permissible, provided one transacts and documents such policies which honor the principles of Shariah.

Your Question: please let me know whether i m correct or not , if not then give some proof and inshaALLAH i may change my stand.

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 274-276:

But those who devour ‘riba’ become like the one whom Shaitaan has bewitched and maddened by his touch. They have been condemned to this condition because they say, “Trade is just like ‘riba”, whereas Allah has made trade halaal and ‘riba’ haraam. Henceforth, if one abstains from taking ‘riba’ after receiving this admonition from his Lord, no legal action shall be taken against him regarding the ‘riba’ he had devoured before: his case shall ultimately go to Allah. But if one repeats the same crime even after this, he shall go to Hell, where he shall abide for ever! Allah deprives ‘riba’ of all blessing and develops charity, and Allah does not like an ungrateful, sinful person.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

Allah says in the Holy Quran Chapter 4 Surah Nisa verse 161:

That they took ‘riba’, although they were forbidden. And that they devoured men’s substance wrongfully. We have prepared for those among them who reject faith a grievous punishment (of Hell Fire)!

Beloved brother in Islam, we reiterate again, that it is not the concept of insurance per se which is unlawful in Islam; but it is the ‘riba’ upon which all conventional insurance is based upon which is absolutely and unconditionally prohibited and declared ‘haraam’ by Allah and His Messenger (saws). If one takes out insurance from one of the many available ‘Shariah-compliant’ insurance companies, there is absolutely no harm in those transactions.

Even if one argues that he would take out a life-insurance policy from a conventional insurance company based on riba; and in the event he does not die, he will not consume the accumulated ‘interest’….then in the least, he will at least be an accomplice in the system of ‘riba’.

But if he dies, the conventional insurance company will fulfill their contract and pay his surviving heirs their due, which obviously would be from the accumulation of ‘riba’; and it would thus be unlawful for them.

If one argues that neither he (if he does not die), nor his heirs (if he dies) would consume the ‘riba’ from the insurance payout, but use only the installments he paid during his life-time from his lawful earnings….then it would be better and purer to establish a savings, rather than approach the insurance company!

Sahih Al-Bukhari Hadith 7.572 (part) Narrated by Sad

Allah's Messenger (saws) said: ‘…. to leave your heirs rich is better than to leave them poor, begging of others. Nothing you spend seeking Allah's pleasure but you shall get a reward for it, even for what you put in the mouth of your wife."

Dear and beloved brother in Islam, the Messenger of Allah (saws) encouraged the believers to plan ahead and take steps to leave their heirs richer rather than leave them poor to beg of others….but under absolutely no circumstances can one seek the help of what has been clearly declared as ‘haraam’ to do so. A believer is encouraged to plan ahead so that he may leave his heirs with wealth and property, but one must fear Allah and be careful not to indulge in the ‘haraam’ and thus be held responsible and accountable for his transgression in the Presence of the Lord All-Mighty on the Day of Judgment.

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

Your brother and well wisher in Islam,

Burhan