Free life insurance as a benefit of employment

Assalamu’alaikum

My husband’s work offers life insurance as part of their benefits package, is this halal? he is not required to sign up for it to receive the insurance, that’s separate, but he could if wants to.

jazakallah

Wassalam

بسم الله الرحمن الرحيم

الجواب حامدا ومصليا ومسلما

The general ruling regarding life insurance policies is that they are not permissible, as they constitute components of interest and gambling which are both strictly prohibited in Shari’ah. 

Allah ta’ala states in the Quran:

إنما الخمر والميسر والأنصاب والأزلام رجس من عمل الشيطان 

“Indeed wine, gambling, altar stones, and divining arrows are filth and a work of the devil.”

(al-Maidah:90) 

وأحل الله البيع وحرم الربا 

“And Allah has permitted transactions and prohibited interest.”

(al-Baqara:275) 

 ولا تعاونوا على الإثم والعدوان 

“And do not help one another in sins and evil.”

(al-Maidah:2)

The prohibition of interest, gambling and helping in any of these acts is clearly stated in these verses of the Holy Quran.

In the aforementioned scenario, if the employee is not making any contributions towards the premium himself (nor is there any deduction from their paycheck), such insurance would be permissible since it would be deemed as a gift from the employer. However, if there are deductions being made from one’s paycheck for such services, then it would not be permissible to apply for such services.

والله اعلم

Allah subhanahu wa ta’ala knows best.

Omar Baig

Approved by Mufti Husain Ahmad Madani