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Fatwa CenterInsurance and pension plans
Question
A.O.A 1.I need to know about “Insurance Policy” is it good please answer in detail in the light of Quranic views? 2.If a company offers that you submit some fixed amount for 10 year then we will give you this fixed amount after 10 year and more you will get certain amount after 55 year as pension. 3.We asked that in our knowledge there should be “Profit and Loss system” under Islamic laws, and he answer we are pretty sure and we have long practice that our management have never loss in our business. 4.They also offer some provident fund on accidental death. Please answer these questions ASAP.
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad 
is His slave and Messenger.
The ruling of all kinds of insurance is mentioned in Fatwa 81425. As the ruling of mutual funds which are established for the purpose of insurance and to cover disability or death cases; these rulings are mentioned in Fatwa 86689.
Paying a fixed amount to a company on the condition that it will pay him back all the amount he paid after a certain period, along with an extra amount as pension after 55 years, this dealing is not allowed. If he pays the amount to buy shares in this company, then he becomes a partner, and fixing a portion of profit for a partner is not allowed rather a partner has to share in profit or loss. Moreover, a guaranteed profit is also prohibited. If the amount paid to the company was a loan and not a form of partnership, then it is a loan which leads to a benefit and any loan that produces benefit is Ribaa.
In addition, it could also become a type of gambling if the company conditioned the presence of the person after 55 years as due date for taking the amount.
Allaah Knows best.
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