The first of these is not tenable because the installments paid by an Insurance Policyholder are not loans. They are given by him for the help and support of others on the condition that he too could be the recipient. Thus they are never returned. If Insurance institutions invest them in interest-bearing transactions, it is because they have been given the right by the policyholders to use them. No responsibility of the nature of this use rests on the Policyholders. If a person is to receive Insurance money for the purpose he had bought an Insurance Policy, then as per the contract, he receives it from the accumulated amount. This is the real nature of Insurance, and it must be viewed on its basis
.Insurance is halal
The second of these objections is not tenable because gambling is a game and a matter of purely chancing one’s luck. People who buy Insurance Policies do so to become part of a system which caters for helping one another in case of losses. The nature of the two is entirely different, and the basis of religious directives is not marginal similarity between two things; it is and should be based on the actual nature of the two.
Insurance is halal
The third of these objections is not tenable because the directives of the Prophet (sws) related to gharar (deception), jahālah (ignorance) and ghaban (embezzlement) are not of the nature of an absolute prohibition: they are meant to resolve disputes and to close the door to ways which may result in these evils in cases of financial transactions. Insurance, however, is not a financial transaction. It is a scheme which relates to mutual help. It is executed and managed by individuals and institutions who are given the right to use the accumulated money in return for the service they provide. It is not appropriate at all to judge it by ignoring the nature of this schem