Is Life Insurance Halal Or Haram? Get Notified For 2023

Reviewed by: Shakira Ahmed
Fact Checked by: Shahina Islam

Is Life Insurance Halal? Life insurance is a type of financial instrument designed to provide security and financial stability to people and their families in the event of unforeseen occurrences like death or disability. It offers a way to alleviate the financial impact of such incidents by making one-time or reoccurring payments to recipients.

It is crucial to consider if life insurance is compatible with Islamic principles within the framework of Islam. Muslims are led by the comprehensive framework of Islam, which includes financial matters. Knowing whether life insurance is allowed or prohibited by Islamic law is essential for people who want to align their financial decisions with their religious beliefs.

Let’s have a deep dive and discover whether Is Life Insurance Halal?

Several Types of Life Insurance

Term Insurance:

  • Provide protection for the term, which is a predetermined length of time.
  • Provides a death benefit to your heirs in the event that you pass away during the term.
  • Regular premium payments are made, and if you live over the duration of the insurance, there will be no payout.
  • Offers just defensive coverage without any investment elements.

Whole Life Insurance:

  • Combines a component of investing with insurance for protection.
  • Provides protection for the rest of your life.
  • Provides your dependents with a death benefit once you pass away.
  • Depending on the underlying investments accrues monetary value over time.
  • Provides the chance of a greater payoff in the event that the investments perform successfully.

It’s important to keep in mind that there are more versions on the market in addition to these two popular forms of life insurance plans. Depending on personal requirements, financial objectives, and risk tolerance, one may choose between term insurance and whole life insurance.

Muslims must prioritise drafting an Islamic will in addition to thinking about life insurance and long-term financial planning. This guarantees that inheritance is allocated in accordance with Islamic law. In order to preserve their assets and follow Islamic law, UK citizens can benefit from consulting firms like IFG Wills that can help them quickly and effectively create an Islamic will.

Is Life Insurance Halal?

The Islamic community continues to debate and understand the issue of life insurance’s permissibility. While some contend that life insurance devoid of any financial component does not come under the category of haram (forbidden) in Islam, others see it as a way to protect one’s family from unforeseen circumstances.

However, given the wide range of viewpoints on this subject, it is advisable to seek advice from religious leaders or educated financial consultants who are familiar with Islamic financial concepts. 

This makes sure that any financial services or goods being evaluated are in line with the person’s own values and beliefs. People who seek the advice of specialists are better able to weigh their options, find a balance between their financial stability and their religious beliefs, and make wise judgements.

Reasons Why Life Insurance Should Be Considered Haram

Reasons Why Life Insurance Should Be Considered Haram

Is Life Insurance Halal? There are several opinions on whether life insurance is permissible in Islam, and depending on certain circumstances, some people may perceive it as haram (forbidden).

The element of chance and unpredictability included in life insurance is one of the main issues. It is possible to consider the payment of premiums with the potential for a future profit to be a type of gambling, which is forbidden in Islam. 

The lack of assurance over whether the insurance would finally pay off runs counter to the Islamic teachings’ encouragement of stability and certainty.

Is Life Insurance Halal? It is crucial to remember that not all kinds of life insurance are seen negatively from an Islamic standpoint. 

For instance, whole-of-life insurance ensures a payout upon the death of the insured and does not include any investing components, eliminating the element of uncertainty. Sharia law compliance may be possible with this kind of life insurance.

It is important to recognise that different Islamic scholars hold different perspectives on life insurance, and many of them believe that having life insurance is both acceptable and wise for Muslims. 

It is advised to seek advice from religious leaders or financial consultants who are familiar with Islamic financial concepts in order to guarantee clarity and consistency with one’s particular beliefs and values. 

Their knowledge may offer insightful advice and help people make well-informed decisions on life insurance within the context of Islamic teachings.

Read more about topics related to finance-

Are Saving Accounts Haram In Islam?

Are Options Haram In Islam? 


Can I Acquire Life Insurance While Adhering To Islamic Principles?

A: If you decide to get life insurance, you should look into Islamic-compliant solutions. This may entail picking insurance without an investing component or investigating Takaful possibilities. Consultation with Islamic scholars or Islamic financial professionals can help you choose permissible choices.

What Should I Do If I Already Have A Life Insurance Policy And Want To Guarantee That It Adheres To Islamic Principles?

If you already have a life insurance policy and are worried about its Islamic compliance, you can speak with an Islamic scholar or a trained Islamic financial counsellor. 

Are There Any Requirements That Must Be Met For Life Insurance To Be Deemed Halal?

Some academics believe that life insurance may be permitted provided certain requirements are satisfied. Typically, these requirements involve ensuring that there is no interest, gambling, or undue ambiguity. 


Is Life Insurance Halal? Finally, the question “Is Life Insurance Halal?” is a difficult and subtle one in Islamic law. Scholars have varying viewpoints on the permissibility of life insurance in Islam. While some claim that some forms of life insurance are halal, others are sceptical because of concerns about uncertainty, gambling, and interest.

As a Muslim seeking financial stability and protection for oneself and loved ones, it is essential to approach this decision with caution and seek advice from recognised scholars or professionals in Islamic finance.

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