Q. I was wondering if there is any ruling regarding life insurance. The common opinion is that life insurance is prohibited, so what are your thoughts on the matter?
A. This opinion has long been debunked, which is why it is now permitted even in extremely conservative places like Saudi Arabia. The idea was that one is not trusting in God, or benefitting from the death of another. How people reached this opinion is beyond me. What matters is that as humans, we are allowed to do what is best to protect our families, and life insurance, the costs of which are based on actuarial data, is simply a means of doing this. I stress the actuarial data because in Islam, knowledge comes by several formats, some of which is based on the preponderance of the evidence. Some of our duties and norms in life are based not on actuality, but on expectation, given that the empirical evidence suggests an event will occur at a particular time. As such, we can calculate that sunset on December 25, 2099 will be at a particular time, even though there are certain cosmological events that might interfere with this. In like manner, the actuarial data works with evidence to allow for the costs of insurance, even though it may be argued that the quantity of doubt here is certainly more than in the case of the sunset calculation. There are also laws that allow for insurance, one law being that "necessity brings about license – al darura tajlib al taysir" – meaning that if you consider the death of a breadwinner will cause you hardship, then if insurance is a way out, you resort to it. This of course raises the issue of life insurance for kids, etc. Those are all individual questions that each Muslim must make on his / her own. Insurance is supposed to compensate for the financial loss that death may cause. And then there is another rule that actions are by intention. If we are seeking to insure a child so that we may gain by its death, that is most certainly unethical. However, when it comes to saying haraam, I draw the line since if something is NOT clearly forbidden in the Qur'an, we have to prove its negative effects beyond the shadow of a doubt.
Posted October 7, 2013