Life is very uncertain. Given this fact, many people get life insurance to get financial security for their families. However, the question arises whether Islam allows it or not. Is life insurance halal in Islam?
Dr. Zakir Naik and almost every other scholar hold a similar view on getting life insurance in Islam. According to them, life insurance is completely halal in Islam if it does not involve interest (Riba) in transactions.
Before going for life insurance, we need to find out how the company works.
Most life insurance is related to interest. In such cases, life insurance companies take your money and put it in a bank or they put it in a money-based instrument where they get fixed money over a fixed period of time. So they give money to their clients from the amount they earned from interest. Hence, Islam does not allow such sort of insurance.
Dr. Zakir Naik mentions a halal alternative called “Takaful” which is a type of insurance system devised to comply with the sharia laws. This is an Islamic life insurance system in which the companies make halal investments and they pay their customers’ claims from the money earned from those halal investments.