Life Insurance whose interest will be given to charity

4-2-2003 | IslamWeb

Question:

I have a question regarding Life Insurance, Is it allowed in Islam to insure the life of a man? If one decided take a policy (or he has already a policy in which he paid some premium instalments) as an investment and to donate the interest he is getting to some charities and he has the intention only to use money actually deposited. Is this permissible in Islam?
Answer:

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad sallallaahu `alayhi wa sallam ( may Allaah exalt his mention ) is His slave and Messenger.

 

Life insurance, like all other forms of insurance, is forbidden since it constitutes a form of risk and taking other people’s property without right as stated by the Islamic Fiqh Academy. So, a Muslim is required to stop dealing in such transactions.

Also, it is forbidden to benefit from interest that results from insurance, which is Riba (interest and/or usury). However, one is strongly advised to take such interest and spend it on the general welfare of the Muslims with the intention of getting rid of the ill-gotten money but not with the intention of giving charity since Allah, the Exalted, is Good and accepts only that which is good.

Allaah knows best.

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