As with many financial matters, scholars differ on whether insurance is permissible in Islam. Opinions generally fall into three camps—halal, haram, or it depends. Those who deem conventional insurance haram usually cite three concerns:
- Interest (Ribā)
Most insurers invest premiums in interest-bearing instruments, making the contract impermissible. We share this concern and avoid any products that earn or pay interest. - Excessive Uncertainty (Gharar)
Typical term policies promise, for example, $500,000 if you die or become critically ill within ten years—otherwise, the insurer keeps every penny. This level of uncertainty is problematic, and we agree it should be eliminated. - Gambling (Maisir)
Some scholars liken insurance to gambling. We respectfully disagree. Gambling seeks a gain; insurance seeks to offset a loss. Whether it’s auto or life coverage, the aim is to restore you financially if something goes wrong, not to profit from the event.
Our approach is simple: design coverage that removes both interest and excessive uncertainty. When those elements are absent, we’re no longer dealing with the type of insurance many scholars prohibit.
Want to see exactly how we structure such policies? Click HERE for a detailed explanation.
