The insurance industry and how it works has always been questionable to Muslims. Whether it is legal to work in the insurance industry is an important question.
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Is It Permissible To Work In The Insurance Industry?
Working in Insurance is Haram.
Working in the insurance industry, especially in traditional insurance companies, is generally considered illegal (haram) in Islam.
The Qur’an specifically prohibits riba-based transactions and emphasizes the importance of conducting legitimate business;
- Surah Al-Baqarah (2:275): “Those who consume interest will stand ˹on Judgment Day˺ like those driven to madness by Satan’s touch. That is because they say, “Trade is no different than interest.” But Allah has permitted trading and forbidden interest. Whoever refrains—after having received a warning from their Lord—may keep their previous gains, and their case is left to Allah. As for those who persist, it is they who will be the residents of the Fire. They will be there forever.”
The Hadith literature contains narrations from the Prophet Muhammad (peace be upon him) that further affirm the impermissibility of engaging in insurance transactions involving riba, gambling, and ambiguity.
- Jabir said that Allah’s Messenger (ﷺ) cursed the accepter of interest and its payer, and one who records it, and the two witnesses, and he said: They are all equal. [Sahih Muslim 1598]
- Hadith narrated by Abu Huraira (may Allah be pleased with him) cautions against supplicating to Allah while being sustained by haram income. [Sahih Muslim 1015]
This ban stems from the involvement of riba, gambling, and obscurity which are against the principles of Islam. Muslims are encouraged to seek halal sources of income and not engage in transactions contrary to Islamic teachings.
It is important for individuals employed in the insurance industry to actively seek alternative legitimate employment while refraining from being actively involved in the haram trade. Seeking repentance, and doing charitable donations are recommended measures to repent from the past haram earnings.
In summary, Muslims should strive to earn a living in accordance with Islamic teachings, avoid industries and trades with haram elements such as riba, gambling, and obscurity, and seek halal sources of income. In this way, individuals can obtain the blessings and mercy of Allah in their efforts and contribute to a more ethical society.
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