Is Life Insurance Allowed in Islam? Read This!

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Hi all readers! Are you looking for an explanation about “is life insurance allowed in Islam?”? If your answer is “Yes”, congratulations! Now you are reading the right article. Why? Because that is what I will explain in this article. As Muslims, we must understand that. That’s why I wrote this article. So, you should read it to the end!

Specifically, there are three important points about “is life insurance allowed in Islam?” which I will explain in this article. The three important things I mean are as follows:

  1. Why Is Discussion About Life Insurance in Islam Important?
  2. Is Life Insurance Allowed in Islam?
  3. Can I Buy Life Insurance in Islam?

Why Is Discussion About Life Insurance in Islam Important?

The first important thing about “is life insurance allowed in Islam?” What I will explain now is “why is discussion about life insurance in Islam important?”. I want you to understand that first before you read more explanations in this article so that you understand the urgency of this discussion.

Life insurance is one of the new discussions in Islam. The point is that there is no discussion of life insurance in classical Islamic literature. That is one of the reasons for the difference of opinion among experts in Islamic law regarding the legality of life insurance for Muslims.

Life insurance is an agreement between the customer and the insurance company. In the agreement, the life insurance company is willing to bear a sum of money losses due to something in the future after the customer agrees to pay the money.

There are differences of opinion among Islamic legal experts regarding the legality of life insurance. Some Islamic legal experts say that life insurance is halal insurance if it is managed according to Islamic principles. But some other Islamic law experts say that there is no lawful life insurance in Islam. In other words, this second opinion says that life insurance in Islam is conventional life insurance.

Now, if you ask me, “why is discussion of life insurance in Islam important?”, the answer is as follows:

One: Muslims must ensure that all things related to them are halal, their food must be halal food, their clothes must be halal clothing, their cars must be halal cars, their health must be halal health.

Two: there are differences of opinion about the legality of life insurance in Islam as I explained earlier.

Three: Muslims who want to buy life insurance, must understand all things related to life insurance so that they get halal life insurance.

Those are the three main reasons why the discussion of life insurance in Islam is important. If Muslims want to buy life insurance, then they must make sure that the life insurance is halal life insurance. They must ensure that the life insurance funds they provide to life insurance companies are managed according to Islamic principles and do not violate Islamic rules. That is the main reason why they should cover all aspects of life insurance.

That’s a brief explanation of “why is discussion about life insurance in Islam important?”. As Muslims, we must understand that.

Is Life Insurance Allowed in Islam?

The second important point about “is life insurance allowed in Islam?” what I’m going to explain now is a specific answer. I want you to understand that because that is the main discussion in this article.

Before I explain the answer to the question, “is life insurance allowed in Islam?”, firstly, I want to explain the difference between life insurance in Islam and conventional life insurance. Why? Because that’s what causes differences of opinion among Islamic law experts about the legality of life insurance in Islam.

In general, if we read some literacy about life insurance in Islam and conventional life insurance, then we will find an explanation that the difference is the concept of managing life insurance funds.

The concept of life insurance in Islam and the management of life insurance funds in Islam are in accordance with Islamic rules. The point is that it must not violate the rules of Islam. Life insurance in Islam forbids fraud, coercion, managing illicit funds, and so on. The point is that Islamic principles and Islamic rules become the standard for managing life insurance.

In life insurance in Islam, risk coverage is between the insurance company and the insurance participants (risk sharing). Participants help each other and help each other. Fundraising is managed by sharing the risk with the insurance company and participants.

The concept of conventional life insurance and the management of conventional life insurance funds do not make Islamic principles and Islamic rules the standard for life insurance management.

In conventional life insurance, the transfer of risk from the participant to the company is full (risk transfer). In full, the insurance will bear the risk on behalf of the insured, according to the agreement.

Now, if you ask me, “is life insurance allowed in Islam?” The answer is that life insurance is permissible in Islam if the concept of managing life insurance and life insurance funds is in accordance with Islamic principles and Islamic rules. But if the management is not in accordance with Islamic principles and Islamic rules, life insurance is not allowed in Islam.

That’s a brief explanation of “is life insurance allowed in Islam?”. As Muslims, we must understand that.

Can I Buy Life Insurance in Islam?

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