It is a common strategy where the estate holds illiquid assets. Confirm the insurance structure with a scholar as well as an advisor.
The Canadian position
It is a common strategy where the estate holds illiquid assets. Confirm the insurance structure with a scholar as well as an advisor.
Provincial law governs the detail, so confirm the position where the estate will be administered.
The Islamic position
The fixed shares apply to the net estate after funeral expenses, debts and any bequest capped at one third.
Where a Canadian instrument has no classical counterpart, treat it as a contemporary question for a qualified scholar.
This is not a four-school question, and we did not build a four-school table for it: commercial insurance companies postdate all four schools, and the Kuwaiti Encyclopaedia has no entry on the instrument at all. What the schools do agree on are the three tests it is judged against — riba, maysir and gharar. Applying those tests is a contemporary question, and the bodies that have ruled disagree: the Islamic Fiqh Academy, the Muslim World League Academy, the Saudi Board of Senior Scholars, AAOIFI and AMJA prohibit commercial insurance and point to takaful; the Egyptian Dar al-Ifta permits life insurance.
No school ruled on this instrument; named present-day bodies differ. Reviewed 2026-09-01. Full positions, evidence and sources — Is commercial life insurance permissible?.
Related madhhab issue: Do life insurance proceeds enter the estate?.
Making an Islamic will in Canada — province by province, and what makes one valid where you live →
This is legal information only. For advice on your own circumstances, speak to a lawyer.
Citations & sources
Every factual claim on this page traces to a source below. Details change — check the original source before relying on any figure, fee or legal position. Anything under “further reading” is related material, not a source for what is stated here.
- Shari'ah Standards — AAOIFI
- What to do when someone has died — Canada Revenue Agency
- Income Tax Act, RSC 1985, c 1 (5th Supp) — Justice Laws Canada
- Separate will for foreign assets ontario strategy — Treadstone Law
- Common law couples life insurance beneficiary ontario — Treadstone Law
- Do beneficiaries pay tax on inheritance canada — Treadstone Law
- Can life insurance reduce estate taxes — Treadstone Law
- Wills & estates practice — Treadstone Law