There is a difference of opinion on whether life insurance is allowed in Islam, even if death is caused through natural causes, accident or any diseases. Shari'ah scholars who are in a minority and are opposed to life insurance consider it as gambling on the Will of Allah. What is your view? If you agree with the scholars position please explain why you agree and recommend an alternative way for Muslims to seek protection against risk and provide financial security for the family and business.

First of all we should understand the meaning of the word “Insurance”; insurance means “risk management”. There is no doubt Islam has permitted risk management. Imam Bukhari and many other compilers of Traditions recorded about Sa’d ibn Abi Waqqas the famous companion, that he sought permission of the Prophet (peace be upon him) to give away his entire property in charity. The Prophet (peace be upon him) said: No! Not the whole of it. Then he asked: Then should I give away half? The Prophet (peace be upon him) forbade him do even that. Then Sa’d asked permission for one third. The Prophet (peace be upon him) replied: Yes! You may give away one third even though this is also rather too much. Then the Prophet (peace be upon him) added: It is far better to leave your family and kith and kin as rich persons rather than as dependents on others- that they may become beggars.
This is exactly risk management, and the Hadith clearly explains its permissibility. There are many Hadiths indicating this matter. Islam compels to believe that everything happens according to the Will of Allah, but in the same time it has permitted to take precautions.
So, any Life Insurance company will not say that, they guarantee the clients death. Rather, it is a Fund which will assist your dependants after your death.

Whether life insurance consider as a gambling on the will of Allah, I personally think that it depends on the intention of the policyholder.

Life Insurance/Family takaful is just a risk management tool for people to provide financial security/assistance to their family in the event of losses. It is sort of precaution so that when people die, their dependents will not be in financial difficulties situation, insya Allah.

Allsalam alikum wa rahmatu allah wa barakatuh

As all muslims know that insurance is harram because we believe in qada' wa qader. i read all fatwas about insurance in general during my career. i worked a long time in islamic takaful funds, the issue in insurance in general is that insurance really manages risk. and i really appreciate the story that was mentioned. its a known haddith, but i have a different openion about this issue because i really believe in islamic dealing but we have to really first understand the fiqh al muamalat in islam. Actually when someone dies all his wealth should be distributed according to the islamic rules. so if you are rich, the person should not worry because all his money will be distributed according to qura'n. also the story above teaches us about islamic justic that we should take care of our families also even after we die, to make this point clear, sometimes the father will deprive one sone from his wealth, this is haram, according to sunnah and quran. in jahilia arabs used to do that. also the story above teaches us to think of the poor people in this world. because if we do good through the takaful then we have won the paradise. in short i want to say that, islam is build on helping others either muslims or not. in the old times they had 'bayt al-mal' its like a finance ministry now, their income consist of zakat and cooperative mutual funds. thats why islam came with this method of takaful which means that everybody helps everyone else.

I think it all depends on the concept or idea of the person taking the insurance. Islam is in line with any form of risk management strategies provided its operation is not in disagrrement with the shariah. The rashidun caliphs have praticed the bait al mal system used in stimulating the economy of the ummah from misfortunes and other econmic problems. all these are done in consonance with risk management practice.

Ahmad kollere