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Types of insurance are known and its rulings in Islamic Shari'ah

We are pretty much familiar with insurance now we will discuss about each type of insurance hope the discussion will be very useful for you so let's read that discussion from start to end.

Types of insurance are known and its rulings in Islamic Shari'ah

Types of insurance and its identity and its rulings in Islamic Sharia.

Insurance is mainly divided into three categories based on the needs and requirements of the people.

  1.  Life insurance
  2.  General Insurance
  3.  Miscellaneous Insurance

What is life insurance?

Insurance taken on human life is called life insurance. It is not an argument for indemnification. The insurance promises to pay a fixed amount to the insured or his heirs in the event of any accident to the life or death of the insured.

What are the types of life insurance?

 There are seven types of life insurance namely :- Life insurance

  1.  Term insurance
  2.  Joint Insurance
  3.  Family insurance
  4.  Health insurance
  5.  Personal insurance
  6.  Accident insurance
  7.  Annual superannuation insurance
  8.  Scholarship Insurance

What is Life Insurance?

 Life insurance is termed as life insurance which does not pay out any amount before the death of the insured. In this case, after the death of the insured, a fixed amount of money is paid to the nominee as per the contract.

 What is term insurance?

 Term insurance is the insurance which is done for a fixed period called term insurance in which the entire amount of insurance is paid according to the contract if the insured dies within a specified period or on completion of the specified term.

What is Joint Insurance?

 Joint Insurance Insuring more than one person together is called Joint Insurance. In this case, in case of death of any one, the entire amount is returned to all the policyholders as per the insurance contract.

 What are the types of joint insurance?

 There are three types of joint insurance 1, Term insurance. 2. Guaranteed insurance. 3, Longest life insurance.

 What is annuity insurance?

 Annuity insurance is an insurance policy in which the insured pays the sum in lump sum or installments.

What is Family Insurance?

 Family insurance is the insurance that focuses on the occurrence of any risk or accident on the life of family members is called family insurance.

 What is health insurance?

 Health insurance is the insurance which is taken out with the intention of getting financial benefits in case of damage to the insured's health is called health insurance. All the medical expenses of the policyholder are borne by the insurance company.

 What is Personal Accident Insurance?

 Personal accident insurance is a life insurance policy in which the insured person gets financial compensation in case of death or bodily injury due to an accident, his/her nominee or himself/herself.

Progressive Term Insurance (With Profit)

 This plan offers a large amount of insurance coverage at a relatively low premium. Young people prefer this insurance at the beginning of their career. Generally, premiums are paid at a lower rate for the first five years of insurance. After this period, when the income increases significantly, the premium has to be paid at a relatively increased rate.

 Advantages :-

 (1) Progressive term insurance is a special type of term insurance which expires at the age of 70 years of the policyholder. However, generally after five years of taking up the policy, the policyholder can reduce the term by paying premium at an increased rate thereafter. To avail this opportunity, the remaining term of the insurance at the time of conversion should be at least 10 years. If this special benefit is not taken by the policyholder, the policy automatically matures at 70 years. For conversion before or after five years revised rates of premium are available on request from the office of the Corporation.

 (2) Medical examination is not required at the time of conversion. Supplementary benefit cannot be accepted with this insurance.

 What is the ruling on life insurance in Islamic Shariah?

 The order of life insurance in Islamic Shariah is that it is clearly proven in the analysis of the rules and procedures of conventional life insurance that there are haraam activities like interest and gambling and many other things that are against the Shariah are also included, so this insurance is not permissible. So for those who have done it, the principal money saved for them, the additional money of Halal is not Halal, the insurance should be stopped as soon as possible. As per the contract with the principal amount, the additional amount due will be raised, but the excess amount must be given in charity without the intention of reward.


  Fatwa Usmani 3/331, Jadid Fiqhi Masa'il 4/124, Aap Ke Masa'il Aur Un Ka Hall 6/255, Fatwa Rahimiya 9/273.

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