Fatwa ID: 08272

Answered by Molana Sibghat Ullah

Question:

I will highly appreciate if you kindly clarify the following confusion. I have bought “Critical Illness” 25 years ago and I have paid $74.07 per month, total of $22,200 approx. There is a clause in the policy that I will get my principal back if I do not have any critical illness, i.e. cancer, heart attack, transplant etc. I am 61 years and got very sick and need transplant. Soon I will qualify for the Critical Illness Insurance which is $100,000 (one hundred thousand dollar).

My question is can I keep the total 100 K for myself and family and is it halal? If not, can I keep my principal what I paid, $22,000 and give the rest to needy in the family and charity?

بِسْمِ اللهِ الرَّحْمنِ الرَّحِيْم

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

Insurance is considered haram due to the presence of gharar (uncertainty) and riba (interest)[i].

If you have already paid your insurance and are due to receive benefit from it, then it is better that you keep the principal amount for yourself and the remaining money for charity without the intention of getting any reward[ii].

Hope this answers the question.

Only Allah knows best.

Written by Molana Sibghat Ullah

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

References:

[i] Al Binayah Sharah of al Al Hidaya, Book of transaction, Volume 5, Page 142, Maktabah al Ilmiyyah

“ولا يجوز بيع ما فيه غَرَرٌ، لأن الغَرَرَ نوع من أنواع الغبن”

It is not permissible to sell what involves gharar, because gharar is a type of exploitation.

[ii] Radd al-Muhtar, Volume 4, Chapter of Riba,  Darul fikr

المال المكتسب من الربا يجب التخلص منه ويجب أن يُعطى للفقراء بدون نية التصدق به للثواب

The money earned from riba must be disposed of, and it should be given to the poor without the intention of gaining reward.