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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