Life insurance





As salaamu alekum,  

I needed your help in getting a question answered. Is taking out a life insurance policy permissible for us as Muslims?  There are Muslims I know who are doing this and I needed to clarify whether it is right or wrong. 
Jazak Allahu khairan

بسم الله الرحمن الرحيم

الجواب حامدا ومصليا ومسلما


In a life insurance policy, premiums are paid over a period of time to the company so that, in the future, a lump sum of money may be given to either the policy holder or his family, depending upon when the policy holder passes away. Since it is uncertain how much money the company will give back, this transaction is impermissible. If the money taken back from the company does not equal the total sum of the premiums given, the excess money (whether given to or taken from the company) will be interest, which is also haram. Therefore, taking out a life insurance policy is not permissible.

If someone has already done so in the past, they should void the policy whenever possible, take back the sum of money which they have already given, and refrain from taking extra.

والله اعلم

Allah subhanahu wa ta'ala knows best.

Taha Abdulkareem

Approved by Mufti Husain Ahmad Madani