Taking life insurance on home mortgage

9-6-2003 | IslamWeb

Question:

I would like to know if it's acceptable or forbidden in Islam to pay the house insurance company an extra amount monthly so in case of my death before paying the remaining mortgage in the determined period, the insurance will pay off the balance and my family will not lose the house and suffer hardship. Please know that I live in the United States and took Halal mortgage from an Islamic financial company.

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Answer:

Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions. It is unlawful to deal with insurance companies or make contract with them, as this is pure gambling. But if this company is an Islamic insurance cooperative, then it is lawful to deal with it, as doing so is a help in righteousness and piety. There is no legal objection to dealing with such Islamic institutions. For more details about insurance, please read Fatwa: 81425. Allah knows best.