Zakah
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Insurance Related |
| How should you pay Zakah on conventional Insurance Policy type of investments? Monthly Insurance Premiums are assumed to be paid from halaal sources. The insurance company will generally invest in halaal and haraam avenues. Thus certain percentages of revenue to the policy will be halaal even in conventional non-Muslim Insurance companies. However, the formats in which such companies even buy and sell shares and other halaal financial instruments can often be impermissible and thus nullify the validity of consuming money and financial returns even from a product/share that is halaal. In such a case, many South African Ulema advised that all profit on the policy be distributed as Sadaqah. Thus, you will pay Zakaah on the premiums or the "accumulated premium payments" at the date of your Zakah liability and not on the policy value or the surrender value. The ruling would be different where the policy is based on a total Halaal fund or set of halaal financial instruments. (Ahmed Fazel Ebrahim) |