Is personal life insurance permissible for a person who cannot get car insurance?

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

It is not permissible to take out any conventional form of insurance due to it consisting interest, gambling and uncertainty, all of which are prohibited in Islam. This applies to all forms of conventional insurance, be it life, home, or car insurance. Consider the following verses:

يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا إِنْ كُنْتُمْ مُؤْمِنِينَ. فَإِنْ لَمْ تَفْعَلُوا فَأْذَنُوا بِحَرْبٍ مِنَ اللَّهِ وَرَسُولِهِ وَإِنْ تُبْتُمْ فَلَكُمْ رُءُوسُ  أَمْوَالِكُمْ لَا تَظْلِمُونَ وَلَا تُظْلَمُونَ (سورة البقرة 278-279)

Translation:  O you who have believed, fear Allah and give up what remains (due to you) of interest if you are believers. And if you do not, then be informed of a war (against you) from Allah and His Messenger. But if you repent, you may have your principal, you do no wrong, nor are you wronged.

الَّذِينَ يَأْكُلُونَ الرِّبَا لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ الَّذِي يَتَخَبَّطُهُ الشَّيْطَانُ مِنَ الْمَسِّ ذَلِكَ بِأَنَّهُمْ قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا فَمَنْ جَاءَهُ مَوْعِظَةٌ مِنْ رَبِّهِ فَانْتَهَى فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللَّهِ وَمَنْ عَادَ فَأُولَئِكَ أَصْحَابُ النَّارِ هُمْ فِيهَا خَالِدُونَ (سورة البقرة 275)

Translation: Those who consume interest cannot stand (on the Day of Resurrection) except as one stand who is being beaten by Satan into insanity. That is because they say, "Trade is like interest." But Allah has permitted trade and has forbidden interest. So, whoever has received a warning from his Lord and stops, he may have what is past, and his affair rests with Allah. But whoever returns to (dealing in interest or usury) those are the companions of the Fire; they will abide eternally there.

However, if one is required by law to take out insurance, for example, medical and car insurance, then one will be excused only to the extent of the requirement. In the case of purchasing a vehicle, life insurance policy is not required. Thus, it will not be permissible to acquire a life insurance policy to cover the damages to the car.

And Allah Ta’āla Knows Best

Shakib Alam

Student - Darul Iftaa

Pennsylvania, USA

Checked and Approved by,

Mufti Ebrahim Desai.

02-26-1442|10-14-2020