Ruling on Life and Property Insurance

Authored by: Fatwas of the Saudi Fatwa Committee

Life and property insurance are deemed haram (prohibited) and impermissible in Islam. This prohibition stems from their inclusion of:

1. Gharar (deception or uncertainty)
2. Riba (usury or interest)

Allah, in His mercy towards the Ummah and to protect it from harmful practices, has declared all transactions involving usury and deceit unlawful. Allah Almighty says in the Qur'an:

"وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا"

(Translation: Allah has permitted trade and has forbidden usury.) [Al-Baqarah: 275]

Additionally, it is authentically reported from the Prophet Muhammad (ﷺ) that he forbade transactions involving deceit.

[Reference: Sahih Muslim, 1513/4]

Shaykh Ibn Baz (رحمه الله) emphasizes that life and property insurance are not permissible due to these fundamental violations of Islamic principles.

[Reference: Ibn Baz, Majmu' Al-Fatawa wa Al-Maqalat, Vol. 19, Page 314]