Term vs Whole Life Insurance | Sharia-Compliant Life Insurance
All Notes
29 June 2025
Notes on Life Insurance for Muslim Professionals
Overview
The video discusses the importance of life insurance for Muslim professionals, emphasizing the need for financial protection for families in the event of an untimely death. It highlights the two main types of life insurance—term and whole life—and presents options that align with Islamic values.
Importance of Life Insurance
- Generational Wealth: Many Muslim professionals are building wealth but often neglect protection for their families.
- Risk Management: Life insurance is a tool for responsible planning and protecting loved ones.
- Key Questions:
- Would your family be financially secure if something happened to you?
- Can your spouse maintain the household?
- Will your children be able to attend college?
- Can your business survive?
Life Insurance Basics
- Definition: A contract where you pay premiums to an insurance company in exchange for a death benefit to your beneficiaries if you pass away during the coverage period.
- Uses of Death Benefit:
- Cover funeral expenses
- Pay off debts (mortgages, car loans)
- Fund children's education
- Sustain family’s standard of living
Types of Life Insurance
1. Term Life Insurance
- Coverage Duration: Set period (10, 20, or 30 years).
- Key Features:
- Fixed monthly or annual premiums.
- Affordable, especially for young and healthy individuals.
- No investment components or cash value.
- Ideal For:
- Individuals with dependents.
- Those paying off loans or mortgages.
- People seeking affordable protection while building assets.
- Example: A healthy 35-year-old can secure $500,000 in coverage for about $50/month.
2. Whole Life Insurance
- Coverage Duration: Lifetime coverage as long as premiums are paid.
- Key Features:
- Fixed premiums that do not increase with age.
- Cash value component that grows over time (tax-deferred).
- Guaranteed payout regardless of when the insured passes away.
- Ideal For:
- Individuals aged 30-60 planning for the long term.
- Those wanting to leave a legacy or fund charitable giving.
- Estate planning or business continuity considerations.
Islamic Perspective on Life Insurance
- Sharia Compliance: Both term and whole life insurance can be structured to align with Islamic values.
- Personal Story: A case of a 42-year-old engineer who passed away unexpectedly without life insurance, leaving his family in financial distress. For about $50/month, he could have secured $500,000 in halal coverage.
Conclusion
- Call to Action: The speaker encourages viewers to consider life insurance as a means to protect their families and align their financial plans with their faith.
- Partnership: Collaboration with Ishklas Insurance Group to provide Sharia-compliant life insurance options.
- Consultation Offer: Invitation to book a free one-on-one consultation to discuss aligning financial plans with Islamic values.
Visual Representation of Key Concepts
| Feature | Term Life Insurance | Whole Life Insurance |
|---|---|---|
| Coverage Duration | 10, 20, or 30 years | Lifetime (up to age 99 or 100) |
| Premiums | Fixed, affordable | Fixed, never increases |
| Cash Value | No cash value | Cash value grows over time |
| Death Benefit | Paid if death occurs during term | Guaranteed payout at any time |
| Ideal For | Young families, debt payers | Long-term planners, legacy builders |
| Example Cost | ~$50/month for $500,000 coverage | Varies, typically higher than term |
These notes provide a structured overview of the video content, emphasizing the significance of life insurance for Muslim professionals and the options available that align with Islamic principles.