Shar‘i Status of Insurance and Premium: Fatwā and Clarification
Source: Aḥkām wa Masā’il, Issues of Buying and Selling, Vol. 1, p. 366
On 28 March 1992, Saturday, Daily Jang Karachi published a report stating:
“Insurance business and premium are not ḥarām, according to the fatwā of a board of Muslim scholars.”
This board reportedly consisted of scholars from Saudi Arabia, Egypt, Sudan, and other countries. Please clarify this matter.
Al-ḥamdu lillāh, waṣ-ṣalātu was-salāmu ‘alā Rasūlillāh, ammā ba‘d!
Your letter was received in which you referred to the news clipping from Daily Jang. The headline in the clipping reads:
“Insurance business and premium are not ḥarām, according to the fatwā of Muslim scholars’ board.”
However, the original text of the fatwā issued by the board was not provided in the news report. Until the actual fatwā text is presented in its original form, no definitive judgment can be made about whether it is correct or incorrect.
It must be remembered that newspaper headlines cannot be fully trusted, as they often distort, exaggerate, or alter the actual content. Hence, relying on a headline alone is neither academically sound nor Shar‘ī valid.
As for the Shar‘i ruling regarding insurance and premiums, it is clearly stated that:
✿ Insurance business and premium are ḥarām.
✿ There is absolutely no doubt about their prohibition.
The fundamental reasons are:
◈ Ribā (interest) is present in insurance.
◈ Qimār (gambling) is also involved.
Both ribā and qimār are categorically and decisively forbidden in Sharī‘ah.
Therefore:
➝ The business of insurance and dealing with premiums are not permissible in Islam.
ھذا ما عندي والله أعلم بالصواب
Source: Aḥkām wa Masā’il, Issues of Buying and Selling, Vol. 1, p. 366
❖ Question:
On 28 March 1992, Saturday, Daily Jang Karachi published a report stating:
“Insurance business and premium are not ḥarām, according to the fatwā of a board of Muslim scholars.”
This board reportedly consisted of scholars from Saudi Arabia, Egypt, Sudan, and other countries. Please clarify this matter.
❖ Answer:
Al-ḥamdu lillāh, waṣ-ṣalātu was-salāmu ‘alā Rasūlillāh, ammā ba‘d!
Your letter was received in which you referred to the news clipping from Daily Jang. The headline in the clipping reads:
“Insurance business and premium are not ḥarām, according to the fatwā of Muslim scholars’ board.”
However, the original text of the fatwā issued by the board was not provided in the news report. Until the actual fatwā text is presented in its original form, no definitive judgment can be made about whether it is correct or incorrect.
It must be remembered that newspaper headlines cannot be fully trusted, as they often distort, exaggerate, or alter the actual content. Hence, relying on a headline alone is neither academically sound nor Shar‘ī valid.
❖ Shar‘i Status of Insurance and Premium:
As for the Shar‘i ruling regarding insurance and premiums, it is clearly stated that:
✿ Insurance business and premium are ḥarām.
✿ There is absolutely no doubt about their prohibition.
The fundamental reasons are:
◈ Ribā (interest) is present in insurance.
◈ Qimār (gambling) is also involved.
Both ribā and qimār are categorically and decisively forbidden in Sharī‘ah.
Therefore:
➝ The business of insurance and dealing with premiums are not permissible in Islam.
ھذا ما عندي والله أعلم بالصواب
