Assalaamu Alaikum Is it permissible to take out life insurance as to ensure that my family are provided for after I die? Please supply the evidence (daleel) for your response.

Mrs N. Ahmed(Glasgow)

Answer

The issue about life insurance has always been a controversial one. Muslim scholars are divided on the subject of the permissibility of life insurance. Some consider it forbidden on the assumption that it involves a kind of gambling and it goes against the principle of taqdir (predestination) in Islam.

But, equally, you could argue that gambling upsets the normal system based on work and reward and is unfavourable to even-handed distribution of income and wealth, whereas insurance protects the disruption of the system by accidents and events beyond human control.

I am under the ruling that totally rejects any practice of insurance on the grounds that no one can insure life, health, or safety because, verily, these things are in the hands of Allah Taa’la and so therefore it is impermissible. Also, because it involves the elements of Riba (interest), Garar (uncertainty) and Qimar / Maisir (gambling).

One should also be aware that Garar can be in either the object or the subject matter of a transaction. On this, our Most Beloved Prophet, Hadhrat Muhammad-ur Rasullullaah (Sallallaahu Alayhi Wasallam) had prohibited transactions with Garar. It is stated in Fataawa al-Lajnah al-Daa’imah that it is not permissible for the Muslim to insure himself against sickness, whether he is in a Muslim or a non-Muslim country, because that involves ambiguity (doubt) and a kind of gambling.

A renowned scholar, Shaykh Ibn Uthaymeen says that life insurance is not permissible because if the angel of death (Hadhrat Izra’il) comes to the one whose life is insured, he cannot refer him to the insurance company.

So, this is a mistake and a foolish misguidance, and it involves depending on his company to take care of his heirs instead of Allah Taa’la, which means depending on someone other than Allah Taa’la and verily, Allah Taa’la is the provider and the protector. This is akin to gambling, indeed it is gambling in a real sense, and in His Book Allah Taa’la mentions gambling alongside shirk, divination with arrows and alcohol.

Let’s conclude with a verse of the Holy Qur’an where Allah Taa’la says, “Whereas Allah (Taa’la) has permitted trading and forbidden Riba.”(Al-Baqarah 2:275)(VERILY, ALLAH TAA’LA IS ALL-KNOWING!)