Saturday, January 31, 2015

Is Life Insurance Haram or Halal?

A working man in the Kingdom of Saudi Arabia has to go through a lot of troubles and worries when he is trying to secure the future of his family, mainly his children. A Saudi man eventually has to do much of the work since the wives are subjected to stay home and take care of the family and household. This makes it the responsibility of the man to make sure that in case something wrong happens to him his family can have a future. Out of many different discussions one of the topics which don’t seem to have an answer as yet is whether Life Insurance policies are Haram or Halal?

Today's read is a focus on a debate that still hasn't gotten a proper consensus. In the Kingdom of Saudi Arabia and other countries around the globe, Life Insurance is a way of securing one's future, saving up money and other things that will help their family if something happens to them. This Life Insurance program provides the basis to the family of living on and keeping the children safe till they are of an age where they can look out for themselves. Many scholars however continue to find an answer to the question whether Life Insurance is permissible in Islam or not? If it is not then why? If it is, then why hesitate to pick up a package?

To start the debate here I'd like to introduce you to the two packages that are available at almost all of life Insurance companies. The first one being term policy and the second one being endowment policy. The term policy involves payments of modest premiums by the insured for over a period of a few years, nearly 18-20 years. In return for this his family will receive an agreed sum of money that can fund his family for over a large period of time after his death. Though, if the insured man remains alive till the end of the period of the policy he will eventually get nothing at all. Though, he will be having a state of mind that he will be leaving a lot for his family.

The other being endowment policy involves the payment of a whole lot of larger premiums invested by the insurance company he is in accompany with. As the policy begins to reach maturity and establishes itself well the insured receives a large sum of money including many shares of profits which he may have helped in under the terms of investment made by himself by the insurance company. Though what we can figure out from all of this is that if the Insurance Company invests money into work and companies that are under Islamic and Shariah are Haram then the money received will be halal. If not then this is Haram and will not be allowable under Islamic rules. But the question about the Halalness of Life Insurance is still questionable and I don’t think scholars will be able to make consensus about it even in future.

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