Answered by Ustadh Salman Younas
Question: Is it permitted to invest in life Insurance? What if the Insurance company says it doesn’t lend money to banks to give others as loans? The Insurance company says they invest in real estate land properties only, and do not invest on any buildings which promote gambling or liquor sales etc. So is investing in such a company permitted in Islam?
Answer: assalamu `alaykum
The default legal ruling of conventional insurance is that it is impermissible due to its incorporating elements of interest and chance, both of which are prohibited in the Qur’an. This is nearly a consensus position among scholars.
Since one of the conditions for investing in a company is that the main activity of the company be permissible, it would not be permitted to invest in an insurance company even if some of its own investments are in permitted lines of work, such as real estate.
Checked & Approved by Shaykh Faraz Rabbani