Receiving Money of Life Insurance

Question:

Respected scholars, as-salamu `alaykum.

Thank you for the great service you provide for the Ummah.

I need your advice on a matter that has been troubling me. My mom is a non-Muslim living in the US. A few years ago, she took out a life insurance on herself and she made my sisters and I the beneficiaries, but I found out only recently. Her intention really is that her funeral expenses and debts would be covered and if there is anything left over, her children would get something.

Is it haram for me to receive any of this money? I was thinking of asking her to take my name off, but I know that would hurt her so I've decided to let it be. But whenever the time comes, I can tell my sisters I can't take anything if that money is haram for me. Jazakum Allahu khayran.

Answer (Dr. Monzer Kahf):

Wa `alaykum as-salam wa rahmatullahi wa barakatuh.

In the Name of Allah, Most Gracious, Most Merciful.

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

Dear sister in Islam, thank you for your kind words; we ask Almighty Allah to grant you halal (Arabic for: allowed according to Islamic teachings) and to bless it for you and let you stay away from haram (Arabic for: prohibited according to Islamic teachings).

As far as Islamic Shari`ah is concerned, insurance is a new contract
and has many types and forms. Insurance is a controversial issue among
Muslim jurists and some of Muslim jurists are of the opinion that it is
halal as long as the contract is not interest-based and the object of insurance is permissible.

In his response to your question, Dr. Monzer Kahf, a prominent economist and counselor, stated,

Dear sister, please do not tell her to take your name out, do not upset your mother, and do not abstain from taking your share from the insurance benefit when the time comes, because doing so would make you lose a halal money.

The benefit of insurance to you from a policy purchased and paid for by a non-Muslim is perfectly permissible for the following reasons:

Insurance is not prohibited by all scholars of Islam. There are very knowledgeable and wise Shari`ah scholars who argue that it is permissible. According to this view, it is permissible to take for a Muslim and to take the benefit when paid by the insurance company.

Some argue that an insurance contract has gharar (Arabic for: due uncertainty) and, therefore, it is not permissible for a Muslim to enter into this relation. However, a Muslim would accept it: Since you are not a contracting party, you do not undertake any sinful action. But the issue here is not the insurance contract, but a benefit you are entitled to by virtue of a contract (of which you are not a party) that is valid according to the law of the land.

It is simply like this: There is a company that pledges that when your mother dies, the company will give you a sum of money. What is wrong in taking it? Can you find any reason to refuse it? Please think of it this way, and show me what is wrong in taking a sum if one says, "Because your mother dies, I am here giving you this amount." It is of course halal for you even if you believe that insurance is prohibited (a view that I do not personally share).

You are not involved in any insurance at all are you?

Source: Islamonline.net