Is Life Insurance Permissible?

Question and answer details
Name of Questioner:	Oumou
Reply date:	2012/01/26
Question:	As-salamu `alaykum. Could you please help me know if it is haram to contract a life insurance and critical illness insurance plans? I am a member of a professional association that offers it to its members and I was thinking about having those plans. Jazakum Allah Khayaran.
Mufti:	Monzer Kahf
Answer Wa `alaykum as-Salamu wa rahmatullahi wa barakatuh. In the Name of Allah, Most Gracious, Most Merciful. All praise and thanks are due to Allah, and peace and blessings be upon His Messenger. Dear sister, thank you very much for your question that shows your concern about Islam and its teachings. Insurance of all kinds is controversial. In your case, it is permissible to sign this contract provided it is term life insurance. Responding to your question, Dr. Monzer Kahf, a prominent Muslim economist and counselor, stated, Insurance of all kinds is controversial. My own belief is pioneered by a great scholar of his time (he died in July 1999) Shaikh Mustafa Az-Zarqah who was recognized as the most knowledgeable Shari’ah scholar of his time. He argued that insurance is a new contract which is permissible provided it is clean of interest and its subject-matter is permissible. This includes life, serious illness, old age, hazards, medical, car, etc., i.e., all kinds of insurance. The late Mawdudi has similar argument too. Accordingly, this contract in your question is permissible provided it is term life insurance because what is known as whole life policy (which includes a lump sum payment to the insured if she/he does not die during the contract). Usually life insurance issued by employers and associations are term life, but you need to check. Allah Almighty knows best. Source : http://www.onislam.net/english/ask-the-scholar/financial-issues/insurance/455553-is-life-insurance-permissible.html