Life insurance

Fatwa ID: 02573

Answered by: Maulana Javed ibn Nazir Kachhalia

Question

Assalam-o-Alaikum,
This is Engineer M.Ajmal from Lahore. I belong to the middle-class family. One of State Life Insurance company agent is forcing me to take insurance policy for my children's future.

This insurance company has got so many Islamic reasons/proofs to do insurance but I am confused about it.  I am very upset about my financial career and my children. So what should I do? Should I take this insurance policy? 
What is the Islamic point of view regarding State Life Insurance?

Please issue a fatwa for me so that I can do everything peacefully if it's not going against the Islamic Laws/Orders.

Answer

In regards to your query;

It has been written in ‘Aapke Masa’ail aur unke Hal’:

“ Insurance (any category or type) is not permitted because there is an element of gambling and also interest (Riba), but in some circumstances to take up insurance (in this case car insurance) in some places and countries is obligatory, therefore, will be permissible” (Aapke Masa’ail aur unke Hal’, Vol 6, Pg 255, Maktabh Ludhyanvi)

It is a well-settled principle of Shari’ah that every transaction between two parties in which the payment by one party is certain and mandatory while payment by the other party depends upon a contingency (which may or may not occur) is included in qimar and gharar and is therefore unlawful.”. (Ahsanul Fatawa, Vol 7, Pg 24, Saeed Company)

There are three reasons for the impermissibility of this:

  1. Interest

The Holy Prophet of Allah SallallahuAlahiWasalam has said, “To take one dirham of interest knowingly is worse than committing adultery 36 times.” (Mishkaatul-Masaabeeh)

  1. There is an element of deception. The insurance contract contains uncertainty due to the amount being paid is not fixed and the time it will occur also being uncertain.

The Prophet of Allah SallallahuAlahiWasalam has “forbade deception and uncertainty in transactions.” (SunanTirmizi)

  1. Gambling

Insurance policies require payment of money, thereafter if the following mishaps were to occur a payment would be made. This is a pure form of gambling.  (Raddul Muhtar p.577 v.9)

You can find more information in regards to your query on our website:http://daruliftabirmingham.co.uk/life-insurance-money/

Only Allah knows best.

Written by Maulana Javed ibn Nazir Kachhalia

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

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