Income Protection Insurance
Question
(1) Is income protection insurance lawful in the current economic climate? Income protection insurance provides with financial support if one is unable to find work, due to accident or illness or redundancy.
(2) Can we act as brokers and support individuals to take out this insurance? We would receive a commission based on the policy premium, and if the policy is cancelled within two years, the commission would be repaid on a pro-rata basis.
بسم الله الرحمن الرحیم
Answer
(1) Income protection insurance is prohibited because of garar (uncertainty) and qimār (gambling) therein. In addition, there is no exceptional need to justify it. Losing a job is speculative, and a person who becomes redundant can seek alternative employment or access state benefits. For those who fall ill or have an accident, there are a range of employer and state benefits that can be accessed.
(2) It is prohibited for a broker to sell or facilitate income protection insurance and similar insurance schemes.
قال الله تعالى: وتعاونوا على البر والتقوى ولا تعاونوا على الإثم والعدوان. وعن أبي هريرة قال: نهى رسول الله صلى الله عليه وسلم عن بيع الحصاة وعن بيع الغرر، رواه مسلم (١٥١٣)۔
Allah knows best
Yusuf Shabbir
15 Dhū al-Qaʿdah 1441 / 7 July 2020
Approved by: Mufti Shabbir Ahmed and Mufti Muhammad Tahir
