Fatwaa ID: 089

Question:

Assalamoalaykum is it halaal to use money from ppi claims??

JazaKAllah 

Answer:

In the Name of Allaah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Payment protection insurance (PPI), also known as credit insurance, credit protection insurance, or loan repayment insurance, is an insurance product that enables consumers to ensure repayment of credit if the borrower dies, becomes ill or disabled, loses a job, or faces other circumstances that may prevent them from earning income to service the debt. It is not to be confused with income protection insurance, which is not specific to a debt but covers any income. PPI was widely sold by banks and other credit providers as an add-on to the loan or overdraft product[1].

In principle, entering into an insurance scheme is impermissible due to the haraam elements found therein[2]. If you have entered into one, then you are only entitled to the premium you have paid[3]. Any additional amount must be given away in charity[4].

And Allaah Ta’aala Knows Best.

Muajul I. Chowdhury
Student, Darul Iftaa
New York, USA

Checked and Approved by,
Mufti Ebrahim Desai.

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين

[1] https://www.fca.org.uk/ppi/ppi-explained

[2] You may refer to following link for further details. http://www.askimam.org/public/question_detail/39379

[3]  فتاوى عثماني (3/ 544)

[4]  حاشية ابن عابدين (رد المحتار) (6/ 385)

ويردونها على أربابها إن عرفوهم ، وإِلا تصدقوا بها لِأَن سبِيل الكسب الْخبيث التصدق إذا تعذر الرد على صاحبه

البحر الرائق شرح كنز الدقائق (8/ 229)

وإلا يتصدقوا به؛ لأن سبيل الكسب الخبيث التصدق إذا تعذر الرد

تبيين الحقائق شرح كنز الدقائق (6/ 27)

وإلا تصدقوا بها؛ لأن سبيل الكسب الخبيث التصدق إذا تعذر الرد على صاحبه.

احسن الفتاوى (7/ 16)

فتاوى محموديه (16/ 381)

__________________
Disclaimer

Darul Iftaa New York answers questions on issues pertaining to Shari’ah. These questions and answers are placed for public view on askthemufti.us for educational purposes. The rulings given here are based on the questions posed and should be read in conjunction with the questions. Many answers are unique to a particular scenario and cannot be taken as a basis to establish a ruling in another situation. 

Darul Iftaa New York bears no responsibility with regard to its answers being used out of their intended contexts, nor with regard to any loss or damage that may be caused by acting on its answers or not doing so.

References and links to other websites should not be taken as an endorsement of all contents of those websites. 

Answers may not be used as evidence in any court of law without prior written consent of Darul Iftaa New York.