Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.  (May Allah's Peace, Mercy and Blessings be upon all of you)

 

One of our brothers/sisters has asked this question:

dear brothers

pls advice whether insurance in silam is allowed. such as life policy, insuring goods against fire,floods and other calamaties. according quran and hadees allah says yr prperty will be safeguarded by paying the zakath , its the insurance. or u can insure with big insurance companies like lloyds or any other,

may allah bless you

 

yours brother in islam

 

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)

 

Answer:

 

Insurance

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol, no person,  no grave, no prophet,  no imam,  no dai,  nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

 

It is not the concept of insurance per se which is illegal in Islam, but rather what is ‘haraam’ and forbidden in Islam is the ‘interest-based’ aspect which is utilized by the conventional insurance companies during their transactions when conducting the insurance business. 

 

Almost all the conventional insurance companies transact their business based on interest, and it is this interest aspect which is deemed absolutely haraam in Islam.  But Alhamdolillah, today there are several Islamic Insurance Institutions which provide insurance cover on various aspects based on Shariah principles, and there is absolutely no harm in seeking insurance from such ‘interest-free’ institutions.

 

The absolute majority of the scholars are of the opinion that ‘life-insurance’ is impermissible because unlike other calamities and eventualities which may or may not effect man, death is one thing that is Decreed for every son of Adam by their Lord and Creator, Allah Subhanah.

 

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me.  Allah Alone Knows Best and He is the Only Source of Strength.

 

 

Your brother and well wisher in Islam,

 

Burhan