What is the Shariah ruling on selling commercial life, car or home insurance policies in a call centre, persuading clients in non-Muslim countries by calling them, and on the income earned from such a job?

According to the unanimous decision of the Islamic Fiqh Academy (Jeddah) and the majority of contemporary scholars, prevalent commercial insurance — whether for life, vehicles or property — is impermissible and haram in Shariah. There are three basic reasons for its prohibition:

• Outright gambling (qimar): The policyholder pays a fixed sum in instalments; if an accident or death occurs, he receives more than the total he paid, otherwise his money is forfeited. Profit and loss depending purely on an uncertain event is pure gambling.
• Severe gharar (uncertainty): The Prophet ﷺ strictly forbade transactions involving gharar (Sahih Muslim: 1513). In insurance it is not known with certainty how much benefit the customer will receive, when he will receive it, or whether he will receive anything at all.
• Riba (interest): Exchanging money for a smaller or larger amount of money, or guaranteeing a fixed profit, constitutes riba al-fadl and riba al-nasi'ah. Using inflation or depreciation of currency as an excuse for interest-based profit is invalid in Shariah.

Call centres promote the misconception that because the clients are non-Muslims, selling insurance to them is permissible. In Shariah terms this is not correct:

• The governing principle: Things whose prohibition is established in themselves — such as interest, gambling and deception — are also haram to practise and to contract with non-Muslims.
• Cooperation in sin: Allah the Exalted says: ﴿وَلَا تَعَاوَنُوا عَلَى الْإِثْمِ وَالْعُدْوَانِ﴾ — “Do not cooperate in sin and transgression” (Surah al-Ma'idah: 2). Calling any person and persuading him to take an interest- and gambling-based policy is, explicitly, cooperation in sin.

Specifically seeking out young people so that they keep paying instalments over a long period is part of the insurance companies' commercial exploitation; promoting such a practice does not befit a Muslim.

If an employee's basic work is to call people, sell them insurance policies, conclude their contracts, and take a commission or salary for that, then this employment is impermissible in Shariah, and its income does not fall within the category of halal and pure earnings.

Translated from the original Urdu fatwa.