[Ruling on insurance for goods and for life]

Answer: As it appears, insurance has three different forms:
The first form: That a person pays, for example, a sum of money each month to a company or to a particular body, on condition that if that person is afflicted by, for instance, a fire in his house or something similar, that company or body compensates him for what he has lost, whatever it may amount to. What appears is that there is no objection to entering into such an arrangement; among its examples is what the people of the farzah (taxi stand) do with the hire cars. This form can be attached to the chapter of undertaking (iltizām), and it is evidenced by His saying, Exalted is He: “O you who have believed, fulfill [all] contracts.” [al-Māʾidah:1] and by the report: “The believers abide by their conditions”, and: “Fulfil (your promises) when you promise.”
The second form: That a person pays, for example, a sum of money each month, and when someone in need is afflicted by some calamity that befalls him, he is assisted out of that money. This form also has no objection in it; rather, entering into it is preferable because of the beneficence and righteousness (iḥsān wa birr) that it contains.
The third form: What is called life insurance; that is, a person pays each year, for example, a defined sum of money, on condition that if he dies in that year, the company or body pays a defined sum of money to the children of the deceased. What appears to me is that this form and what resembles it is not permissible to enter into, except in one case, namely: that the money paid to the company be equal to the money paid out to the heirs of the deceased.

Source: Min Thimār al-ʿIlm wa al-Ḥikmah vol.2