Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver — licensed Financial Advice Provider (FSP712931) · Last updated 2026-10-20

Is life insurance halal? Questions for New Zealand Muslims

Scholars do not all agree. The widely reported concern is that conventional insurance involves uncertainty (gharar), resembles gambling (maysir) and can involve interest (riba), so many scholars treat it with caution or reject it, while a minority disagree. Takaful is the cooperative alternative. We found no takaful life provider among the New Zealand insurers we reviewed. QuoteHub cannot give a religious ruling: that is for a qualified Islamic scholar.

Get a quote and apply online today

See your price in about a minute, then apply online with Momentum Life. Guaranteed acceptance, no health questions, no medical exams.

Life cover See your price Ages 18–65 · $50k–$300k Funeral cover See your price Ages 40–75 · $3k–$30k

Want more than $300k or have questions? Talk to an adviser

Life cover: Conditions you already have aren't covered for the first 2 years (premiums refunded instead). Suicide isn't covered for the first 2 years, and a few conditions can be excluded permanently.

Funeral cover: Only accidental death is covered for the first 2 years. Total premiums can add up to more than the cover, and it may not meet the whole cost of a funeral.

Insurer: Momentum Life Limited. Financial strength rating B (Fair) from AM Best, affirmed 11 February 2026; B ratings sit in AM Best's 'vulnerable' range. The rating scale is available for inspection at every Momentum Life office in New Zealand. What this means

Already have cover? Keep it. New cover won't pay for a condition you already have in its first 2 years.

Opens Momentum Life's online application; its guidance only covers eligibility. QuoteHub is a Momentum Life partner. Smiths Insurance & KiwiSaver may receive a commission if you buy. General information, not advice.

In short

This page gives information, not a fatwa. Religious questions belong with a qualified scholar. Financial questions belong with a licensed financial adviser.
The three concerns usually raised are gharar, maysir and riba. A minority of scholars argue that insurance compensates for events outside a person's control and is not gambling (Wikipedia: Takaful, a general reference, retrieved 20 October 2026).
Takaful is described as a cooperative arrangement in which members contribute to a shared pool. We found no takaful life provider in the New Zealand insurer pages we read, but we could not read the Reserve Bank's list of licensed insurers, so we cannot say none exists.
Every life and funeral policy we cover is a conventional insurance contract. We do not say any product is or is not halal.

Why do some scholars raise concerns about conventional insurance?

Three concepts come up repeatedly in the scholarly discussion summarised by general references.

Gharar is uncertainty. With a conventional policy, you do not know whether the insured event will happen, or how the payout will compare with what you pay.
Maysir is gambling. Critics argue that because of that uncertainty, insurance resembles a game of chance.
Riba is interest. Critics point out that insurers invest their funds and the returns may involve interest.

The same reference says the International Islamic Fiqh Academy (part of the Organisation of Islamic Cooperation) ruled in December 1985 that conventional commercial insurance with a fixed premium is forbidden, social insurance excepted. A critic quoted in the same article describes the Academy as permitting "cooperative insurance, built on the principles of voluntary contribution (tabarru') and mutual cooperation" (Wikipedia: Takaful, retrieved 20 October 2026). We have not read the original resolutions. A minority of scholars take a different view, so your own scholar may hold a different position from the one described here.

What is takaful, and how is it different?

Takaful is described as a cooperative, Sharia-compliant alternative to conventional insurance. Participants contribute to a shared pool, the contributions are treated as donations, and an operator manages the pool and pays members for covered losses. Models differ: under a wakala model the operator charges an agency fee, and under a mudharaba model the operator shares profits and losses with the participants (Wikipedia: Takaful). That is a general description. We have not assessed any particular scheme, and a scholar should judge whether a specific scheme meets the standard they follow.

Is takaful available in New Zealand?

We could not find it. The life and funeral insurers whose pages we have read for this site include Momentum Life, AIA, Chubb Life, Fidelity Life, Asteron Life, Partners Life, NZ Seniors, AA Life, Golden Insurance and Pinnacle Life. None of them describes its product as takaful. The two Momentum Life policy wordings we hold do not mention Islamic or Sharia principles at all.

That is not proof that no provider exists. Life insurers such as Momentum Life are licensed by the Reserve Bank, and when we tried to load its list of licensed insurers on 20 October 2026 the page returned an access error. We also cannot say whether any overseas takaful operator serves New Zealanders. If you want a takaful arrangement, ask your scholar or a community organisation which providers they know of and then check that the provider is licensed here. The Federation of Islamic Associations of New Zealand lists an Ulema advisory under "About us" and a general contact address, and it is a sensible place to start for community guidance.

What do the New Zealand products actually look like?

If you decide to look at conventional cover, here are the facts of the two Momentum Life products, so a scholar can judge them. Both are ordinary insurance contracts.

Quick Life is guaranteed acceptance life cover for ages 18 to 65, with a benefit of $50,000 to $300,000. You pay stepped premiums to age 75. In the first 2 years it excludes pre-existing conditions and suicide.
Funeral Insurance pays a fixed benefit of $3,000 to $30,000 towards costs, for ages 40 to 75, with acceptance guaranteed. In the first 24 months it pays only for accidental death; any other death in that window pays no benefit and all premiums are refunded. Total premiums can end up larger than the benefit, and the benefit may not cover the whole funeral.

See Quick Life and Funeral Insurance for the full terms, and the funeral insurance hub for how funeral products differ. Momentum Life's A.M. Best rating is B (Fair); see Momentum's financial strength page. QuoteHub is a Momentum Life partner, and Smiths Insurance & KiwiSaver may receive a commission if you buy through our link; see how we are paid.

What questions should you ask?

For a qualified Islamic scholar

Does the position you follow allow conventional insurance in any circumstances, for example where there is no alternative?
If so, does it matter whether the contract is life cover that pays on death or a funeral benefit?
Would you treat savings set aside for the purpose differently from a policy?
Does necessity (darurah) apply to my situation, and how do you assess it?

For a licensed financial adviser

Who depends on my income, and what would they need if I died?
What debts would my estate have to pay, and what passes to my family outside the estate?
What can I do without insurance: savings, an enduring power of attorney and a will, or a funeral account?
If I take cover, which structure and which insurer fit my circumstances, and how are you paid?

What are the alternatives to buying a policy?

Alternatives depend on the need, and none is a ruling on permissibility.

Save for it. A separate savings account can build a fund for funeral costs, but it will not pay a large sum if you die early. The average full funeral with cremation for 50 guests is $11,700 and with burial $14,300 (FDANZ 2026 report).
Know what ACC covers. ACC pays for covered injuries only, not death from illness (ACC).
Plan the estate. A will says who inherits; the probate guide explains what the executor does. Ask a lawyer how Islamic inheritance principles can be reflected in a will under New Zealand law.
Know the government help. The Funeral Grant is up to $2,697.43, and other help including prepaid funeral cover can affect eligibility (Work and Income).

Advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). This is general information, not personal advice. A healthy person can usually get more cover for less with fully underwritten cover through an adviser. We have not ranked any insurer here, and the buttons on this page lead to Momentum Life's quote only for those who have decided to look.

Frequently asked questions

Is life insurance haram?

Scholars differ. Many treat conventional insurance with caution; a minority disagree. Ask a qualified scholar who follows the school you follow.

Is funeral insurance halal?

The same questions apply. Funeral Insurance is a conventional contract, so a scholar needs to assess it. Funeral costs can also be met by saving.

Can QuoteHub tell me which product is halal?

No. We are not scholars and we do not issue religious rulings.

References

Wikipedia: Takaful, a general reference, retrieved 20 October 2026
Federation of Islamic Associations of New Zealand, retrieved 20 October 2026
Momentum Life: Financial strength, retrieved 20 October 2026
Momentum Life: Funeral Insurance Policy Wording (17 August 2023), retrieved 17 October 2026
Momentum Life: Quick Life Insurance Policy Wording (November 2025), retrieved 17 October 2026
FDANZ: 2026 New Zealand Funeral Industry Trends Report (PDF), retrieved 20 October 2026
ACC: Financial support after a death, retrieved 20 October 2026
Work and Income: Funeral Grant, retrieved 20 October 2026