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: FtawySummarized from the full answer at Ftawy · imported 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."
Summarized from the full answer at Ftawy · imported
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- Ftawy
- Original fatwa ID
- 19740
- Imported
- Translation status
- Source text, unreviewed
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