Is it Allowed to Stay in an Insurance Contract till the Last Minimal Loss Without Making a Profit? – Mawlana Ilyas Patel

Answered by Mawlana Ilyas Patel

Question

Living in Austria, a brother subscribed to two life insurance policies from a non-Islamic company and now wants to resign, facing substantial financial losses. For the first policy, he paid €5,500 with a €2,000 deduction, and for the second, he paid €7,000 with a €3,300 deduction. Can he delay resigning to minimize losses, is it sinful to remain in these contracts, and is the returned money halal?

Answer

In the Name of Allah, the Most Merciful and Compassionate

I pray you are in good faith and health. Thank you for your question and for seeking an Islamic answer.

It would be sinful to remain with the policy. You will only take and use the premium you have paid; any excess amount received above the initial premium is unlawful and not permissible to use. 

As a note, one should not leave any amount with the insurance company; instead, take it using the premium and give the excess to the extremely needy and poor.

Allah Replaces With Better

As you are leaving the policy for the sake of Allah, He will, in shaAllah, replace it with something better, bless your life, and give you an abundance of blessings in your sustenance.

Abu Qatada (Allah be pleased with him) reported that the Prophet (Allah bless him and give him peace) said, “Verily, you will never leave anything for the sake of Allah Most High but that Allah will replace it with something better for you.” 

[Musnad Ahmad]

I would like you to go through the valuable answers and links below. You will receive guidance and direction in sha Allah.

Why not begin your search for knowledge by signing up for a course on SeekersAcademy (seekersguidance.org), like from the Islamic Studies Curriculum (seekersguidance.org) or Youth Islamic Studies Curriculum (seekersguidance.org), building your way up doing each course?

I pray this helps answer your question.

[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani

Mawlana Ilyas Patel is a traditionally-trained scholar who has studied within UK, India, Pakistan, Syria, Jordan and Turkey.

He started his early education in UK. He went onto complete hifz of Qur’an in India, then enrolled into an Islamic seminary in UK where he studied the secular and Alimiyyah sciences. He then travelled to Karachi, Pakistan.

He has been an Imam in Rep of Ireland for a number of years. He has taught hifz of the Qur’an, Tajwid, Fiqh and many other Islamic sciences to both children and adults onsite and online extensively in UK and Ireland. He was teaching at a local Islamic seminary for 12 years in the UK where he was a librarian and a teacher of Islamic sciences.

He currently resides in UK with his wife. His personal interest is love of books and gardening.