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Question
May Almighty Allaah bless you all for the kind of work you have been doing. I have one question, if you could please clarify this to me.
The question is: What if a company provides a life insurance policy for all of its employees. The staff does not have to pay any premium; everything is done by the company. This policy covers life insurance as well as accident, if anything happens for the policy holder; the whole amount is given to his family members. In view of Quran and Hadeeth, is this Halal to take this money. Can you please provide the Hadeeth?
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 issued Fatwa 81441 on life insurance clarifying that it is a forbidden kind of insurance and that Islam does not approve of it.
There is no difference whether the instalments for this kind of insurance are paid by the employee or the company where he works. It is not permissible for the employee to take this money when he is sick or injured and it is forbidden for his heirs to take anything from this money when he dies except the amount that the company had already paid to the insurance company. This is of course if the injury or the death is not caused by the company where he works or caused by anyone else and then he was directed to this someone. However, if the injury or the death is caused by the company or any other party and then they direct the injured or his heirs to the insurance company to get compensation for the injury or Diyyah (blood money) for his death, then there is no harm in taking the compensation or blood money from the company to which the injured or his heirs are directed, according to the compensation for injury or blood money but they should not take more than that amount.
Allaah Knows best.
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