What Islam Says About Life Insurance Policy

Praise be to Allah.

Shaykh Ibn Baaz (may Allah have mercy on him) was asked about life insurance, and he said:

Insurance of one’s life or possessions is haram and is not permitted, because it involves gharar (buying/selling something where it is not known whether what is being bought/sold will actually be achieved/delivered, or in what specific quantity, thus putting one’s money at undue risk to being lost) and riba (usury, interest). Allah has forbidden all transactions that are based on riba, and all transactions which involve deceit, as a mercy to this ummah, and to protect them from that which may harm them. Allah says (interpretation of the meaning):

“whereas Allah has permitted trading and forbidden Ribaa”[al-Baqarah 2:275]

And it was narrated in a saheeh report that the Prophet (peace and blessings of Allah be upon him) forbade deceit. And Allah is the source of strength.
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