Quora Answer: According to Shari’ah, is It Riba’ if I Purchase Long-Term Care Insurance?

بِسۡمِ ٱللهِ ٱلرَّحۡمَـٰنِ ٱلرَّحِيمِ 

The following is my answer to a Quora question: “According to shari’ah, is it riba’ if I purchase long term care insurance? 

Life insurance may be treated as a financial instrument, but it is not necessarily an investment.  You are putting money into a product that pays out in the event of an untimely tragedy, whether death, disability or critical illness.  It is a hedge against the cost of adjusting to the loss of a family member, particularly a bread winner.  Riba’, usury, pertains to an unjust financial relationship, where there is an element of zhulm, oppression.  An example would be borrowing from someone or an institution, where the structure of the interest makes it impossible for you to ever pay the debt.  Another example would be to sell you a derivative where the value of the underlying asset is essentially speculation.  Insurance is not riba’.


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