Yes. Working on a commercial insurance company is haram because this is a cooperating in sin.
According to the Quran, Sunnah, and the consensus of Muslims (ijma’), the commercial insurance deal is haram due to the riba, ambiguity, and gambling involved. Since you get paid from halal money, working for such an institution or company in Islam is not permissible. Also, working for an insurance company means encouraging people to take risks and engage in activities that could harm themselves or others. Allah (ﷻ) said:
وَتَعَاوَنُوا۟ عَلَى ٱلْبِرِّ وَٱلتَّقْوَىٰ ۖ وَلَا تَعَاوَنُوا۟ عَلَى ٱلْإِثْمِ وَٱلْعُدْوَٰنِ ۚ
Cooperate with one another in goodness and righteousness, and do not cooperate in sin and transgression.
[Al-Ma’idah 5:2]
Muslims cannot work for companies that engage in riba. Riba is prohibited for all employees working in the business, including doorkeepers and security guards, since this helps the business conduct haram transactions. Allah (ﷻ) said:
يَـٰٓأَيُّهَا ٱلرُّسُلُ كُلُوا۟ مِنَ ٱلطَّيِّبَـٰتِ وَٱعْمَلُوا۟ صَـٰلِحًا ۖ إِنِّى بِمَا تَعْمَلُونَ عَلِيمٌۭ ٥١
O, messengers (ﷺ)! Eat from what is good and lawful, and act righteously. Indeed, I fully know what you do.
[Al-Mu’minun 23:51]
Jabir (Radiya ‘llahu ‘an-hu) 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]
Making money from Haram companies is also Haram. Once prophet Muhammad (ﷺ) tells us of a man in desperate need of Allah (ﷻ), since he earns haram, his supplication (dua) is not answered.
The Messenger of Allah (ﷺ) said, “A man who, having journeyed far, is disheveled and dusty, and who spreads out his hands to the sky saying “O Lord! O Lord!” while his food is haram (unlawful), his drink is haram, his clothing is haram, and he has been nourished with haram, so how can [his supplication] be answered?
[Sahih Muslim 1015]
Riba (interest / usury)
Riba is an Arabic word for banking and financial sector fees. It is also used to describe a form of interest charged on loans. Insurance companies generally generate their main income from interest.
وَأَحَلَّ ٱللَّهُ ٱلْبَيْعَ وَحَرَّمَ ٱلرِّبَوٰا۟ ۚ
Allah has permitted trading and forbidden Riba
[Al-Baqarah 2:275]
يَـٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوا۟ ٱتَّقُوا۟ ٱللَّهَ وَذَرُوا۟ مَا بَقِىَ مِنَ ٱلرِّبَوٰٓا۟ إِن كُنتُم مُّؤْمِنِينَ ٢٧٨ فَإِن لَّمْ تَفْعَلُوا۟ فَأْذَنُوا۟ بِحَرْبٍۢ مِّنَ ٱللَّهِ وَرَسُولِهِۦ ۖ وَإِن تُبْتُمْ فَلَكُمْ رُءُوسُ أَمْوَٰلِكُمْ لَا تَظْلِمُونَ وَلَا تُظْلَمُونَ ٢٧٩
O, believers! Fear Allah, and give up outstanding interest if you are ˹true˺ believers. If you do not, beware of war with Allah and His Messenger! But if you repent, you may retain your principal—neither inflicting nor suffering harm.
[al-Baqarah 2:277-78]
Gharar (uncertainty / ambiguity)
Gharar is a term used in Islamic finance to describe a prohibition on transferring assets between parties where there is a risk of the party not meeting its financial obligations to the other party. It is usually used in contracts involving trade, loans, and other financial dealings.
As lawmakers have acknowledged, insurance policies are based on probabilities, meaning ambiguous, since neither the insurer nor the insured knows what he will give or take.
Insurance may be bought by paying installments. However, if an accident occurs, the insurer must pay up, or the insured may not receive anything despite paying all installments.
Abu Huraira (RA) reported that Allah’s Messenger (ﷺ) forbade a transaction determined by throwing stones and the type which involves some uncertainty.
[Sahih Muslim 1513]
Gambling (maysir / qimar)
Gambling is taking a risk: either he will gain more than what he paid, or he will lose what he paid. This actually happens in insurance companies. You will get more or lose all your installments.
يَـٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوٓا۟ إِنَّمَا ٱلْخَمْرُ وَٱلْمَيْسِرُ وَٱلْأَنصَابُ وَٱلْأَزْلَـٰمُ رِجْسٌۭ مِّنْ عَمَلِ ٱلشَّيْطَـٰنِ فَٱجْتَنِبُوهُ لَعَلَّكُمْ تُفْلِحُونَ ٩٠
Intoxicants (alcoholic drinks), Gambling, Al‑Ansaab (stone altars for sacrifices to idols), Al‑Azlaam (arrows for seeking luck or decision) are an abomination of Satan’s handiwork. So avoid that (abomination) so that you may succeed.
[Al-Ma’idah 5:90]
Note: If the government forces you to make insurance, it’s allowed.
When there is no other way to work
Scholars permit people to continue working and use their income until they find a job that meets their needs. At the same time, a person working in an insurance company should seek repentance from Allah and search for another job, and when he finds one, resign from the current job.
If one makes this move purely for Allah’s sake, Allah will reward him greatly for his obedience to Allah’s and His prophet Muhammad’s commands. In sha’Allah.
It is okay to keep the money you made from that job before you learned that it was haram because Allah (ﷻ) said:
After receiving a warning from Allah, they may keep their previous gains, leaving their case to Allah.
[Al-Baqarah 2:275]
Does Islam allow life insurance agents to earn commissions?
The Quran and Hadith prohibit interest and gambling in life insurance. Accordingly, working as an agent for life insurance is prohibited by Shariah. Including life, car, home, health, medical, travel, and phone.
Read More: Is Selling Life Insurance Haram?
Is Takaful allowed in Islam?
Yes. Muslims are allowed to work as takaful agents.
Takaful is a form of insurance. It is designed to protect individuals and their families from financial losses. Additionally, Takaful is viewed as a means of reducing social inequality and poverty.
Summary
Is insurance job halal in islam? No. This may allow for a shorter time frame but will not allow you to pursue a career.
Allahu ‘alam
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