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Is Islamic Insurance Permissible?

26 September, 2022
Q Respected scholars, as-salamu `alaykum. Is Islamic insurance permissible? What is the difference between the Islamic and non-Islamic insurance? How do we get to know that the Islamic insurance we are using is according to the Shariah and correct? Jazakum Allahu khayran.


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.

In this fatwa:

In responding to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:

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Islamic insurance is permissible. You know its authenticity from trusting the truthfulness of the company that provides it, the supervisory authority that allows it to make such a claim [of being Islamic], and the Shariah advisory board of the company. If you trust all these, then the claim is correct; if you don’t, the claim may not be correct.

In brief, the difference between Islamic insurance and non-Islamic insurance is: Islamic insurance is provided on a cooperative basis, and its premium is not a price of covering the risk but a membership in that cooperation that provides these services.

Conventional insurance is based on an exchange between two parties, and the premium is a price of covering the risk.

Almighty Allah knows best.

Editor’s note: This fatwa is from Ask the Scholar’s archive and was originally published at an earlier date.

About Prof. Dr. Monzer Kahf
Dr. Monzer Kahf is a professor and consultant/trainer on Islamic banking, finance, Zakah, Awqaf, Islamic Inheritance, Islamic estate planning, Islamic family law, and other aspects of Islamic economics, finance, Islamic transactions (Mu'amalat). Dr. Monzer Kahf is currently Professor of Islamic Finance & Economics at the Faculty of Economics and Management, Istanbul Sabahattin Zaim University, Turkey