Is Life Insurance Haram or Halal?

Is life insurance haram? One of the most common questions we get asked is whether life insurance is haram or halal. It’s a valid question, and one that has been debated for many years. There are a few schools of thought on this matter. But what is the one definitive belief when it comes to Life Insurance? Read till the end to find out.

What is Haram?

Haram is an Arabic term meaning “forbidden”. In Islam, there are certain things which are considered haram and are therefore not allowed. These things include things like stealing, lying, cheating, and harming others. Haram also includes things like eating pork or drinking alcohol. Muslims believe that these things are harmful to the soul and body, and so they are not allowed.

There are also certain things which are considered haram in Islamic law, such as gambling and usury. Muslims believe that these things are harmful to society and so they are not allowed. Finally, there are certain things which are considered haram in Islam due to their negative effects on the individual or society, such as premarital sex and drug use.

What is Life Insurance?

Life insurance is a type of insurance that pays out a specified amount of money to designated beneficiaries upon the death of the insured individual. The purpose of life insurance is to provide financial protection for the policyholder’s loved ones, such as a spouse and children, in the event of the policyholder’s death.

Life insurance policies come in several different forms, including term life insurance and whole life insurance. Term life insurance provides coverage for a specific period of time, such as 10 or 20 years, and pays out a benefit only if the policyholder dies during that period. Whole life insurance, also known as permanent life insurance, provides coverage for the policyholder’s entire life and pays out a benefit regardless of when the policyholder dies.

When an individual purchases a life insurance policy, they typically pay regular premiums to the insurance company. The amount of the premium is determined by factors such as the policyholder’s age, health, and the amount of coverage they are seeking. The insurance company uses the premiums to fund the policy and pay out death benefits to beneficiaries.

In addition to providing financial protection for loved ones, life insurance can also be used as a savings and investment vehicle. Some types of life insurance policies, such as whole life insurance, include a cash value component that can be invested and grow over time. Policyholders can borrow against the cash value or even surrender the policy for its cash value.

Is Life Insurance Haram?

There is much debate surrounding the topic of life insurance and whether or not it is considered haram (forbidden) according to Islamic law. While there are some who argue that life insurance is permissible, the majority of scholars believe that it is not allowed.

The main reason why life insurance is considered haram is because it involves deceit. Another reason why life insurance is considered haram is because it usually involves interest. Most life insurance policies require the policyholder to pay premiums on a monthly or yearly basis. The policyholder is then typically reimbursed a death benefit if they pass away during the coverage period.

Source Reference – The above information is verified via Islam Question and Answer.


What is the Islamic perspective on life insurance?

The Islamic perspective on life insurance is that it is haram, or prohibited, due to its involvement in elements of deceit and paying interest.

Are there any alternatives to life insurance for Muslims?

Yes, there are alternatives to life insurance for Muslims, such as Takaful insurance, which is a form of Islamic insurance that follows the principles of Shariah.

Is there any way to make life insurance halal?

Life insurance can be made halal by choosing Takaful insurance instead of traditional life insurance as it is based on the principles of shariah.


After much deliberation and research, I have come to the conclusion that life insurance is haram, or prohibited in Islam. This is because it involves elements of deceit and paying interest, which are both considered to be against the principles of the religion.

While there may be some circumstances where life insurance is necessary to protect one’s loved ones financially, in general, it is our belief that it is best to avoid it if possible. As Muslims, we should strive to live in accordance with the teachings of the Quran and the Hadith, and this includes being mindful of the financial products and services we use.

Furthermore, it’s important to note that there are alternatives such as Takaful (Islamic insurance) which is a form of Islamic insurance that follows the principles of Shariah(Islamic Law). It’s worth investigating Takaful as an alternative for life insurance.

It’s important to weigh the pros and cons of life insurance and consider the moral and ethical implications of using this type of financial product. We hope that this blog has been informative and helpful in making an informed decision. Thank you for taking the time to read and understand our viewpoint on this matter.

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Written By Nazim Almasi

Nazim is an Islamic scholar, author and External Consultant at Renewable Energy Maldives. He writes on Islamic finance, food and halal dietary guidelines. He is a respected voice in the Muslim community, known for his clear explanations of complex religious concepts. He has been invited to speak at various conferences and seminars on topics related to Islamic finance, food and Renewable Energy.

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