Wants to give up an insurance policy but is afraid of losing his past payments
4-3-2007 | IslamWeb
Question:
In India, I took a life insurance policy. I need to pay the money for 20 years. Each year, I have to pay 50k rupees. At the end of each five year, they will give me 2 lakhs rupees and at the end of 20 years, in addition they will give some bonus profit based on the profit they got after investing in stock market. But I can't able to know in which companies they are investing my money. Is this transaction is permissible in Islamic shariah or not?. Last three years, I paid the premium for this insurance. If I give-up this insurance now, I will lose this money. But getting Allah's bliss, I am ready to give-up this money. Is it permissible?
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.
First of all, it should be noted that there are two kinds of insurances, one is permissible and one is not permissible. For more benefit in this regard, please refer to Fatwa 81425.
If the insurance in which you invested is permissible and it abides by the religious requirements for investing in a stock market, and which are mentioned in Fataawa 82105 and 81579, then it is permissible to continue in it.
However, if the insurance is forbidden and it invests money in a forbidden way, then, it appears to us, Allaah Knows best, that if you sincerely repent to Allaah from this transaction, then you are permitted to pay two instalments to this insurance until you complete five years, so you may get back most of what you paid to them, for the necessity of protecting one's money, and then you should stop completely.
The principle in this is the religious rule when there is a contradiction between advantages and disadvantages in achieving the greater benefit by overlooking the lesser benefit, and by bearing the lesser disadvantage in order to avoid the bigger disadvantage. Undoubtedly, ruling that it is forbidden in your case to continue in this insurance will lead to you wasting much of your money and leaving it for the insurance company without any right. This is indeed a disadvantage which is greater than the disadvantage of continuing in paying the two instalments or few instalments until you get back most of your money.
The jurists 
permitted some matters which are in principle forbidden in order to protect the wealth (money) of the Muslim, for instance they permitted for a person to deposit his money in a bank which deals with Ribaa (interest and/or usury) if he fears to lose his money and there is no way to protect it except by depositing it in this bank, although, in principle, it is forbidden to deposit money in banks which deal with Ribaa as this means helping in dealing in Ribaa. They also permitted giving a bribe in order to protect one's money from being lost without right, despite the prohibition of giving a bribe; Abu Layth 
said: 'It is permissible for a person to protect himself and his money [wealth] by paying a bribe.'
Such matters are permitted by the jurists despite the harm or disadvantage they consist of, and this is in order to repel a greater evil [harm or disadvantage].
This is what is called by the jurists committing the lesser of two evils; therefore, your case falls under this category.
Allaah Knows best.