Life insurance fully paid by the employer

14-1-2006 | IslamWeb

Question:

If I am working with a company and the company paid full cost for life insurance which will give money to my family after death. If I am working with the company when I pass away, and I am not paying anything on that, is it Halaal or Haraam to engage in such a system?

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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. We ask Allaah to exalt his mention as well as that of his family and all his companions.

 

We have already clarified the ruling on life insurance in Fatwa 81441 and that it is forbidden like other kinds of commercial insurances in which the contracts are not defined and there is cheating in them. The ruling is the same whether the one who pays the instalments of this insurance is the company or the employee, because the amount of this insurance is forbidden [ill-gotten money] and it is not permissible for the employee or his family to possess it. He is only permitted to benefit from an amount equal to the instalments that he had already paid or which the company had paid, but he is not permitted to take anything more than this.

Allaah Knows best.