Is Life Insurance Haram or Halal?

Is Life Insurance Haram or Halal?

Getting life insurance is quite common in current times. Everyone wants to secure the future and life of their families after their death, and life insurance seems the best option. But what does Islam say about life insurance? 

Do Islamic laws permit getting life insurance? Is life insurance haram? 

Yes, life insurance is considered haram in Islam. According to Islamic scholars, insurance of one’s law or possession is haram, and one should not buy life insurance. 

Let’s go ahead and read in detail why life insurance is haram and what happens if someone buys it. 

Why Does Islam Consider Life Insurance Haram? 

Life insurance is prohibited in Islam because it involves Gharar, or buying and selling of something without knowing whether what is bought or sold will actually be achieved or not. Therefore, it means putting your money in uncertainty, risk, or in Riba (interests or usury). 

According to Muslim scholars, Allah forbids all transactions based on Riba. The two central reasons why life insurance is considered haram are- you are betting your life, and secondly, the insurance company receives interest. 

In most cases, the family gets the full amount of the insurance when the policyholder dies within the policy period. This is like gambling, and Allah does not permit you to earn money in such ways. 

Secondly, insurance companies earn interest money as a profit from the policy you buy. And we already mentioned any transaction that involves interests or usury is haram. 


According to some people buying life insurance is also going against the will of Allah. As per them, Allah is responsible for our life and death and for saving us during any trouble. Hence, getting life insurance is like Gharar (uncertain), which is not necessary. 

Allah also does not permit anything which involves interests or profit. When you buy life insurance, both the company and the policyholder earn interest, which again is not right as per Islamic laws. 


Some ardent followers of the religion also say that such insurance policies lead to hypocritical actions. For example, some people willingly damage their things to get the claim; sometimes, it causes family feuds, business disputes, making suicide look like murder, etc. Therefore, it is considered haram. 

However, not everybody believes such reasoning. According to some Muslims, there is nothing wrong with getting life insurance. It is, in fact, a smart decision that can save families from any financial crisis. 

There is also no mention in the Quran about life insurance being haram because such concepts were not there in earlier times. People call life insurance haram because they are trying to relate life insurance to gambling. 



Islamic laws don’t permit getting life insurance because, as per them, it is a Riba. But there are differences of opinion within the community, and some believe that life insurance isn’t haram if it does not involve any Riba clause.  

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