What is the ruling on life insurance contracts?
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Question:
We have heard about car insurance companies and life insurance, so what is the ruling on life insurance? May Allah reward you with good.
Answer:
Insurance is not permissible: not for cars, not for life, and not for anything else; because it is gharar (excessive uncertainty in a contract) and riba (usury or interest), there is no knowledge or certainty in it, but rather it is a gamble. For this reason, the Council of Senior Scholars has studied it for a while and issued a decision prohibiting it. It is called commercial insurance.
As for cooperative insurance: a group of people agreeing to pool money, which is then used for buying and selling, with the benefit and profit shared among them, or for charity for those in need and those afflicted by disaster; this is permissible. It is called cooperative insurance, and there is nothing wrong with it.
We have heard about car insurance companies and life insurance, so what is the ruling on life insurance? May Allah reward you with good.
Answer:
Insurance is not permissible: not for cars, not for life, and not for anything else; because it is gharar (excessive uncertainty in a contract) and riba (usury or interest), there is no knowledge or certainty in it, but rather it is a gamble. For this reason, the Council of Senior Scholars has studied it for a while and issued a decision prohibiting it. It is called commercial insurance.
As for cooperative insurance: a group of people agreeing to pool money, which is then used for buying and selling, with the benefit and profit shared among them, or for charity for those in need and those afflicted by disaster; this is permissible. It is called cooperative insurance, and there is nothing wrong with it.
Source
binbaz.org.sa
The Arabic text is copied verbatim from the original source, without any edits.