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Is Income Protection Policy Lawful in Islam

Answered according to Hanafi Fiqh by DarulIftaBirmingham

Answered by: Mufti Mohammed Tosir Miah

Question

I am a doctor and want to know whether income protection is permissible. It pays the policyholder is incapacitated and they are unable, following illness or accident to perform their own occupation and are not working in another job.

In the name of Allah, the Most Gracious, the Most Merciful

Answer

Income protection policies are impermissible in Islam.

There are three reasons for the impermissibility of this:

  1. Interest

The Holy Prophet of Allah Sallallahu Alahi Wasalam has said, “To take one dirham of interest knowingly is worse than committing adultery 36 times.” (Mishkaatul Masaabeeh p.246 v.1)

  1. There is an element of deception. The insurance contract contains uncertainty due to the amount being paid is not fixed and the time it will occur also being uncertain.

The Prophet of Allah Sallallahu Alahi Wasalam has “forbade deception and uncertainty in transactions.” (Sunan Tirmizi p.233 v.1)

  1. Gambling

Insurance policies require payment of money, thereafter if the following mishaps were to occur a payment would be made. This is a pure form of gambling.  (Raddul Muhtar p.577 v.9)                                        

Only Allah Knows Best

Written by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

This answer was collected from DarulIftaBirmingham.co.uk, which is run under the supervision of Mufti Mohammed Tosir Miah from the United Kingdom.

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