Ruling on Travel Insurance

27-4-2026 | IslamWeb

Question:

When canceling a pre-booked ticket, the transport company typically issues a refund minus a cancellation fee. But, if i want to cancel the trip, i can purchase affordable travel insurance, I can recoup this fee for any reason. However, the claim process is protracted, and the payout timeline is uncertain. From an Islamic perspective, is purchasing this insurance permissible, and can I rightfully accept the payout?"

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Answer:

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad () is His Slave and Messenger.

If this insurance is commercial insurance, then it is prohibited due to the unlawful elements it involves, such as excessive uncertainty, interest, gambling, and unlawfully consuming people’s wealth.

Accordingly, it is not permissible to obtain it by personal choice, nor is it permissible to benefit from it beyond the amount one has paid into it.

However, it is permissible to obtain and benefit from commercial insurance in cases of necessity, such as medical insurance in countries where neither a public healthcare system nor cooperative insurance is available.

Finally, if the insurance referred to in the question is a cooperative takaful insurance – which is based on mutual assistance and charitable contribution – then there is no issue with obtaining it, benefiting from it, or accepting compensation from it.

Allah Knows best