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Why is life insurance Harām but Tazkiya is compliant?


Conventional life insurance and other conventional insurance is prohibited due to it being a contract of exchange with the prevalence of the following elements: 

Ribā (interest)
Maysir or Qimār (gambling)
Gharar (uncertainty)

All these three elements find their roots in that a conventional insurance policy is a contract of

exchange, where the policies are sold in exchange for a premium.

Tazkiya is based on the concept of Takaful which is an Islamic system that is established on the principles of mutual assistance. Takaful is not a contract of exchange but is one of  tabarru’  or voluntary contributions. This is one of the main differences between conventional and Islamic insurance. 

The Takaful fund is explained in more detail in question 10.