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Will, Life Insurance and 401K Plan

Answered according to Hanafi Fiqh by ShariahBoard.org

Assalamualaikum Warahmatullah

Please provide me Islamic guidance regarding the following issues:

  1. Is it permissible for my wife to purchase life insurance? We live in the USA and have only two children. One of my children has autism and he is disabled. We do not have any family members, significant assets or any savings in place. Therefore we wanted to know if we could purchase life insurance. This way me and my wife would leave something for our children to take care of them financially incase (Allah forbid) my wife and/or I were to die.
  2. What is the correct Islamic method of writing wasiyat (will) as Islam encourages writing it during one’s life. Also what is the Islamic law regarding inheritance? We only have two sons, what will be there share in my inheritance according to the Islamic Shari‘ah?
  3. What other Islamic obligations do I have to fulfill when I create my wasiyat?
  4. What is the Islamic view on medical life support? Does Islam allow using such life support which helps a patient whose one or more vital organs have failed or who in a state of emergency needs it to survive?
  5. Is a 401K Retirement plan halal if the plan does not invest in any haram industries? The company states it will match 4% for my contribution of 5% towards the plan.
  6. What is the ruling of discharging Zakat on the total amount of the 401K on an yearly basis (if the 401K is halal)?

JazakAllah Khair

Will, Life Insurance and 401K Plan

Walaikumassalam Warahmatullah

الجواب وباللہ التوفیق

1- Life insurance is considered impermissible and haram according to the Islamic Shari’ah, there is no provision or possibility of its permissibility. Keep your faith in Allah Subhanahu Wa Ta’ala, the biggest support and sustainer for your kids, is only Him.

2- If the parents want to distribute their estate amongst their children during their life span, then the commandment is to ensure equality in that division, regardless if it’s a male or female child. There is gunjaish (provision for permissibility) to give one more than the other, due to disability, poverty or the child’s deeni prowess (greater religious stature). On the other hand, after a person is deceased, the division of their estate is done according to the Shar‘ai rules of distributing inheritance. This division is performed based on the living inheritors at the time of the person’s death and can have several different rulings based on the specific situation, therefore we recommend that it will be better to ask a specific question as per need and specification situation in the future.

3- Islam encourages preparing one’s will, which can have several ways and several different rulings based on the individual’s situation. The person who is preparing his/her will should consider the following details and document the will either verbally or in writing (in a notebook etc.).

Wajib (mandatory): pertains to the rights of Allah (that we have to fulfill during our lives) e.g. fardh salah or salah which one promised to perform as part of a nazr, fasts, zakat, hajj, qurbani (udhaiya), kaffarah (atonements) etc. or the rights of other human beings (that we have to fulfill during our lives) e.g. loans (owed), amanat (things one is keepsaking for others) and any other business (or social) dealings due to which one has rights that he or she needs to fulfill. All these details should be mentioned in the will.

Mubah (permissible actions): pertains to bequeathing something for a welloff individual as part of the will.

Makruh (disliked): pertains to bequeathing something for an individual about whom one has strong belief that he (or she) will utilize the received inheritance in acts of fisq and fujoor (open or hidden sins or transgressions) or will spend it in impermissible acts. Including such an individual in one’s will is considered makruh.

Mustahab (commendable): pertains to specifying something (from one third of the total estate) to be used as a means of one’s source of maghfirah and a surplus towards one’s akhirah, such as taking part in an act of sadaqah for thawab-e-jariyah (whose reward continues even after one’s death), leaving something to help ahl-e-ilm and ahl-e-salah, giving something to one’s relatives to show association with them, or helping a disabled or person in need.

Will (for the specified actions) will be applied from one third of one’s estate, however paying off the loans or giving back amanat will be done from the total estate. Even if someone tries to bequeath in their will from more than one third of their estate, it will not be considered valid and will not be applicable.

For more information on this topic, it will be beneficial to read “Ehkam-e-Mayyat” by Hazrat Dr. Abdul Haee Arifi Rehmatullah Aleh.

One should not document will for their heirs as their rights have already been established and documented in Islamic Shari’ah and it is prohibited to write will for them. Therefore, it is incorrect for you to bequeath for your mother, father and siblings as part of your will. One should not write a clause in their will which blocks any of the rightful heirs from getting their rights.

4- Using medical support mechanisms is considered permissible.

5- It is permissible to enroll in a 401K plan however, it will be permissible for you to consume the money given as profit if with your permission your company utilizes this money in a halal manner for trade/investment. If however, the mode of investment used by the company is not permissible, or if the mode of investment is halal but the amount of money invested (using your 401K savings) the company is only involved in the profit from it and not liable for the loss incurred then taking the money earned as profit will become impermissible. In that situation, you should either not receive the money or if you do receive it then give it as Sadaqah without keeping an intention of receiving thawab.

6- Since this is an optional plan, which one can choose to enroll in, and the employee is contributing the money by his own will, therefore, every year, Zakat is wajib on the overall deposited amount. If any profit is accrued in addition through a permissible mode of investment, then Zakat is also wajib on that profit.

عَنْ عَمْرِو بْنِ خَارِجَةَ أَنَّ النَّبِىَّ -صلى الله عليه وسلم- خَطَبَ عَلَى نَاقَتِهِ وَأَنَا تَحْتَ جِرَانِهَا وَهِىَ تَقْصَعُ بِجَرَّتِهَا وَإِنَّ لُعَابَهَا يَسِيلُ بَيْنَ كَتِفَىَّ فَسَمِعْتُهُ يَقُولُ « إِنَّ اللَّهَ أَعْطَى كُلَّ ذِى حَقٍّ حَقَّهُ وَلاَ وَصِيَّةَ لِوَارِثٍ(سنن ترمذی:کتاب الوصایا،باب ماجاء لا وصیۃ لوارث ذی:۲۲۷۶)

عَنْ عَامِرِ بْنِ سَعْدِ بْنِ أَبِى وَقَّاصٍ عَنْ أَبِيهِ قَالَ مَرِضْتُ عَامَ الْفَتْحِ مَرَضًا أَشْفَيْتُ مِنْهُ عَلَى الْمَوْتِ فَأَتَانِى رَسُولُ اللَّهِ -صلى الله عليه وسلم- يَعُودُنِى فَقُلْتُ يَا رَسُولَ اللَّهِ إِنَّ لِى مَالاً كَثِيرًا وَلَيْسَ يَرِثُنِى إِلاَّ ابْنَتِى أَفَأُوصِى بِمَالِى كُلِّهِ قَالَ « لاَ ».قُلْتُ فَثُلُثَىْ مَالِى قَالَ « لاَ ». قُلْتُ فَالشَّطْرُ قَالَ « لاَ ». قُلْتُ فَالثُّلُثُ قَالَ « الثُّلُثُ وَالثُّلُثُ كَثِيرٌ إِنَّكَ إِنْ تَدَعْ وَرَثَتَكَ أَغْنِيَاءَ خَيْرٌ مِنْ أَنْ تَدَعَهُمْ عَالَةً يَتَكَفَّفُونَ النَّاسَ(سنن ترمذی:کتاب الوصایا،باب ماجاء فی الوصیۃ بالثلث،۲۲۶۲)

عَنْ أَبِى هُرَيْرَةَ أَنَّهُ حَدَّثَهُ عَنْ رَسُولِ اللَّهِ -صلى الله عليه وسلم- قَالَ « إِنَّ الرَّجُلَ لَيَعْمَلُ وَالْمَرْأَةُ بِطَاعَةِ اللَّهِ سِتِّينَ سَنَةً ثُمَّ يَحْضُرُهُمَا الْمَوْتُ فَيُضَارَّانِ فِى الْوَصِيَّةِ فَتَجِبُ لَهُمَا النَّارُ(سنن ترمذی:کتاب الوصایا،باب ماجاء فی الوصیۃ بالثلث،۲۲۶۳)

فيضاران في الوصية من المضارة أي يوصلان الضرر إلى الوارث بسبب الوصية للأجنبي بأكثر من الثلث أو بأن يهب جميع ماله لواحد من الورثة كيلا يرث وارث آخر من ماله شيئا فهذا مكروه وفرار عن حكم الله تعالى ذكره ابن الملك وفيه أنه لا يحصل بهما ضرر لأحد اللهم إلا أن يقال معناه فيقصدان الضرر وقال بعضهم كأن يوصي لغير أهل الوصية أو يوصي بعدم إمضاء ما أوصى به حقا بأن ندم من وصيته أو ينقض بعض الوصية فتجب لهما النار(مرقاۃ المفاتیح:باب الوصایا:۱۰/۲۹)

( قَوْلُهُ وَهِيَ عَلَى مَا فِي الْمُجْتَبَى ) عِبَارَتُهُ وَالْوَصِيَّةُ أَرْبَعَةُ أَقْسَامٍ وَاجِبَةٌ كَالْوَصِيَّةِ بِرَدِّ الْوَدَائِعِ وَالدُّيُونِ الْمَجْهُولَةِ ، وَمُسْتَحَبَّةٌ كَالْوَصِيَّةِ بِالْكَفَّارَاتِ وَفِدْيَةِ الصَّلَاةِ وَالصِّيَامِ وَنَحْوِهَا وَمُبَاحَةٌ كَالْوَصِيَّةِ لِلْأَغْنِيَاءِ مِنْ الْأَجَانِبِ وَالْأَقَارِبِ ، وَمَكْرُوهَةٌ كَالْوَصِيَّةِ لِأَهْلِ الْفُسُوقِ وَالْمَعَاصِي ا هـ وَفِيهِ تَأَمُّلٌ لِمَا قَالَهُ فِي الْبَدَائِعِ الْوَصِيَّةُ بِمَا عَلَيْهِ مِنْ الْفَرَائِضِ وَالْوَاجِبَاتِ كَالْحَجِّ وَالزَّكَاةِ وَالْكَفَّارَاتِ وَاجِبَةٌ ا هـ شُرُنْبُلَالِيَّةٌ .

وَمَشَى الزَّيْلَعِيُّ عَلَى مَا فِي الْبَدَائِعِ ، وَفِي الْمَوَاهِبِ تَجِبُ عَلَى مَدْيُونٍ بِمَا عَلَيْهِ لِلَّهِ تَعَالَى أَوْ لِلْعِبَادِ ، وَهَذَا مَا مَشَى عَلَيْهِ الْمُصَنِّفُ خِلَافًا لِمَا فِي الْمُجْتَبَى مِنْ التَّفْرِقَةِ بَيْنَ حُقُوقِهِ تَعَالَى ، وَحُقُوقِ الْعِبَادِ وَمَا مَرَّ مِنْ سُقُوطِ مَا وَجَبَ لِحَقِّهِ تَعَالَى بِالْمَوْتِ لَا يَدُلُّ عَلَى عَدَمِ الْوُجُوبِ لِأَنَّ الْمُرَادَ سُقُوطُ أَدَائِهَا ، وَإِلَّا فَهِيَ فِي ذِمَّتِهِ فَقَوْلُ الشَّارِحِ عَلَى مَا فِي الْمُجْتَبَى : أَيْ مِنْ حَيْثُ التَّقْسِيمُ إلَى الْأَرْبَعَةِ تَأَمَّلْ۔ ( قَوْلُهُ وَمُبَاحَةٌ لِغَنِيٍّ ) لَعَلَّ الْمُرَادَ إذَا لَمْ يَقْصِدْ الْقُرْبَةَ أَمَّا لَوْ أَوْصَى لَهُ لِكَوْنِهِ مِنْ أَهْلِ الْعِلْمِ أَوْ الصَّلَاحِ إعَانَةً لَهُ أَوْ لِكَوْنِهِ رَحِمًا كَاشِحًا أَوْ ذَا عِيَالٍ فَيَنْبَغِي نَدْبُهَا تَأَمَّلْ ( قَوْلُهُ وَمَكْرُوهَةٌ لِأَهْلِ فُسُوقٍ ) يَرِدُ عَلَيْهِ مَا فِي صَحِيحِ الْبُخَارِيِّ لَعَلَّ الْغَنِيَّ يَعْتَبِرُ فَيَتَصَدَّقَ وَالسَّارِقَ يَسْتَغْنِي بِهَا عَنْ السَّرِقَةِ وَالزَّانِيَةَ عَنْ الزِّنَا وَكَانَ مُرَادُهُ مَا إذَا غَلَبَ عَلَى ظَنِّهِ أَنَّهُ يَصْرِفُهَا لِلْفُسُوقِ وَالْفُجُو (رد المحتار:کتاب الوصایا:۲۸/۴۴۴)

فقط واللہ اعلم بالصواب

This answer was collected from Shariahboard.org. It was established under the supervision of the eminent faqih of our era, Hazrat Shah Mufti Mohammed Navalur Rahman damat barakatuhum.

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