Inheritance from life insurance
Question
- My father passed away few weeks ago (24 Rabiul Akhir 1445), and he did not have a will. We managed to find out about most of the people he owed money to and managed to settle their accounts, Alhamdulillah. However, my daddy had debts with the bank amounting to roughly 350k. According to my understanding, my daddy used to pay an extra amount (insurance) every month to the bank, in the event he passes on, that the insurances settle his debt with the bank. Can we use that insurance to settle his debts as we do not have that amount of money currently to settle the banks?
- My father has a life insurance policy. Since life insurance is not allowed, what should be done with that money? Although I am not sure if that money is going to be paid by the insurance, as it covers accidental death and not natural causes.
Answer
- To settle the outstanding debts of the deceased enjoys superiority over implementing his bequests and distributing the assets belonging to the estate amongst the heirs. Now, since you father was contributing towards an insurance policy over the years, his total contributions in the form of premiums may be used towards settling his debts. If there is a shortfall, then the shortfall should be filled in from the estate.
- The surplus money (from the insurance payout if applicable) over and above his total contributions should be given out to poor Muslims who are eligible for Zakaat. The capital amount forms part of the deceased estate.
References (Arabic / Urdu sources)
قال علماءنا رحمه الله تتعلق بتركة الميت حقوق اربعة مرتبة الاول بتكفينه وتجهيزه من غير تبذير ولا تفتير ثم تقضى ديونه من جميع ما بقي من ماله ثم تنفذ من وصاياه من ثلث ما بقي بعد الدين ثم يقسم الباقي بين ورثته (سراجي ص3(
- Answered by
- Maulana Ahmed Saeed
- Checked & approved by
- Mufti Mohammed Desai Saheb
Fatawa SA is an independent, read-only index of fatawa already published by Darul Ifta Ibn Masood. It is not a fatwa service. For your own situation, ask the issuing Darul Ifta directly.