Is a loan offered by a company, on condition of life insurance for the employee to repay the loan upon death, permissible or impermissible?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
Taking lawful interest-free loans () is permissible, as long as they are not tied to unlawful conditions. Among these is the company's requirement for the borrower to take out life insurance, because insurance of all types is Islamically forbidden, as it is a contract of gambling (), uncertainty (), and usury (riba). Accordingly, it is not permissible to participate in a housing loan program that stipulates life insurance. And "whoever gives up something for the sake of Allah, Allah will compensate him with something better."
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/19740
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 19740
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy