Life Insurance

Question

My mother has taken out 3 life insurance policies for 3 of us siblings. My mother lives with my brother who takes care of all her needs. We have explained to her that this is wrong and that upon her passing, we will not be able to partake of that payout. What is the punishment for this act and how else can we dissuade my mother from paying into this insurance?

Mufti Ahmed Saeed · Accepted Answer

Life insurance policies are Haraam as it is based on interest, gambling and uncertainty (Gharar). Make Taubah and Istighfaar for your mother for engaging in Haraam dealings. There are severe warnings cited in the Mubarak Ahaadith for engaging in interest-bearing transactions and contracts. See below:

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‏”The Messenger of Allah Sallallahu Alaihi Wasallam cursed the one who consumed Riba, and the one who charged it, those who witnessed it, and the one who recorded it.”

The Messenger of Allah Sallallahu Alaihi Wasallam said, “A dirham of usury that a man knowingly consumes is worse than thirty-six acts of adultery.”

The payout of the life insurance policy constitutes:

a) Premiums paid by your mother towards the insurance policy

b) Surplus amount

You may redeem the premiums which were paid towards this insurance policy. The surplus from the insurance policy is Haraam and must be disposed of to the poor and needy.

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