Fatwa ID: 04526
Answered by: Maulana Javed ibn Nazir Kachhalia
Salaam, Mufti Sahib. I hope you are well.
I live in London with my family. Before moving to the UK, my wife purchased a state life insurance plan for my daughter. It is a 20-year plan where we submit 50000 Pakistan rupees annually and at the end of 20 year period, we will get a lump sum amount. I was not in favor of this insurance due to religious reasons at that time as well.
Now we think that we should make a decision about it. In my opinion, the money we will get at the end is NOT HALAL. But I am not sure. Please reply to this query that we should finish this insurance or continue it.
بِسْمِ اللهِ الرَّحْمنِ الرَّحِيْم
In the name of Allah, the Most Gracious, the Most Merciful
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)
The ruling with regards to impure money is that all of it should be given away to the poor without the intention of gaining a reward, rather, merely removing the burden of having unlawful money in one’s ownership.
Therefore, you should really try and terminate the life insurance policy as soon as possible, for it is unlawful. It will not be permitted to have the policy even with the intention of using the money for some good cause.
Only Allah knows best.
Written by Maulana Javed ibn Nazir Kachhalia
Checked and approved by Mufti Mohammed Tosir Miah