Praise be to Allaah.

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

Insurance of one’s life or possessions is haraam 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). Allaah 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. Allaah says (interpretation of the meaning):

“whereas Allaah 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 Allaah be upon him) forbade deceit. And Allaah is the source of strength.

Fataawa Islamiyyah, 3/5
Islam Q&A

I have heard that insurance esp life insurance is haram. If its true, why is it haram?

Insurance | March 4, 2017 5:52 am
Previous

My wife is a qualified dentist but can’t practice in UAE because of licensing issues. Industry were she could get job is Health Insurance company. Is it halal to work there.
Next

In canada health insurance is compulsory. I started a new job and they say by law you have to have extended medical coverage and i will pay monthly for it. And they are also offering short term disability and accidental and life insurance. They say i have to have it by law & the company will be paying for it. Is that permissible. Please help. I’d appreciate your input.