Question Summary:
I currently have two bonds and an overdraft. The initial amount of the bonds have long been paid off, it is basically the interest that I am paying. In order to get out of this sin, I have decided to cancel my life insurance policies

Question Detail:

Can Mufti Saheb please shed light on the following questions.

I currently have two bonds and an overdraft.  The initial amount of the bonds have long been paid off, it is basically the interest that I am paying.  In order to get out of this sin, I have decided to cancel my life insurance policies as these are also not permissible.  From this I will receive my capital investment and a substantial amount of interest.  I will be using this capital amount to pay these debts, but it will not be enough to cover it all.  Can I use the interest money to pay of the remainder, of the bonds and overdraft.  The insurance is with different companies from the bank.  I would like to get out of this sin, and this seems like the only probable solution at this moment.  Will it be permissible to use this interest money to sort out these bonds?
An insurance broker asked me to find out the following question.  If a person takes out insurance not to gain an unfair advantage, but rather if he buys a house, and in the event of his sudden death, he just wants the debt to be sorted out with the bank, and his family has a secure home, will it be permissible in this instance.
Jazakallah.
 
 

Answer :

In the name of Allah, Most Gracious, Most Merciful
Assalaamu `alaykum waRahmatullahi Wabarakatuh
It will not be permissible for you to use the interest money earned on your life insurance policy. In principle, you should have never entered into such a transaction. However, once you entered into the transaction, it will be binding to undo the transaction by returning the interest money to the original owner, namely, the insurance company. Permitting the usage of this money, albeit in a seemingly good cause, would entail envisaging the Sharī‘ah recognizing and permitting an interest-based transaction which is an impossibility. Had the interest money from the insurance scheme been from the very same institution, which you owed the interest on the bonds, there might have been some scope to counter-balance the interest charges. However, since that is not the case, it will not be permissible in your situation. If you have already received interest money from the insurance company, you should return it; if you have not received it as yet, you should refuse to accept it.
In regards to the interest money you owe to the bank for your bonds and overdraft, you should try to find a person who could offer you and interest free loan to pay off your balance if possible. You should also make tawbah and istighfar for entering into these harām transactions resolving never to repeat the same. Based upon you sincerity of intention and repentance, Allah will definitely forgive you.
 
فإذا كان فضل الربا مملوكا للقابض بالقبض فإذا استهلكه على ملكه ضمن مثله فلو لم يصح الإبراء ورد مثله يكون ذلك رد ضمان ما استهلكه لا رد عين ما استهلكه وبرد ضمان ما استهلك لا يرتفع العقد السابق بل يتقرر مفيدا للملك في فصل الربا فلم يكن في رده فائدة نقض عقد الربا فكيف يجب ذلك حقا للشرع وإنما الذي يجب حقا للشرع رد عين الربا إن كان قائما لا رد ضمانه هذه الجملة في المداينات من القنية (مجمع الضمانات ج 2 ص 941 , دار السلام)
 
 
And Allah knows best
Wassalam u Alaikum
Ml. Yusuf bin Yaqub,
Student Darul Iftaa
Checked and Approved by:
Mufti Ebrahim Desai
Darul Iftaa, Madrassah In'aamiyyah

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