Can I Invest in a Life Insurance?

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.

Please see: Are Conventional Insurances Really Impermissible?


Checked & Approved by Shaykh Faraz Rabbani

Divine Life Insurance, Surat al-Fātiḥah (verses 6-7): Duas from the Qur’an Explained

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Receiving an Amount Equal to One’s Paid Life Insurance Premiums Minus Losses

Answered by Shaykh Faraz A. Khan


Insurance itself is haram, but can you please explain a situation like this: Let’s say someone pays 100 pounds a month towards life insurance. At the end of one year – that will equal 1200 pounds total paid. If the person would like to stop payments, he would have to pay a fine of 300 pounds. So he continues paying until the end of the year, when the insurance time expires, he gets 1000 pounds back, because of the loss in investments that the insurance company made during the period (loss of 200 pounds). There is no interest paid.

The question – Is this money that the person received haram or halal? Can it be used for Islamic purpose (sadaqa, building of the mosque, going to hajj, etc?)

Answer: Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health and states.

One is entitled to receive the premiums they paid, so the money is halal and can be used for personal benefit or any charity. The money received in this scenario is not considered riba, even though it is less than what was paid, since that difference was not contractually stipulated.

And Allah knows best.

Checked & Approved by Faraz Rabbani