There is another problem related to the commercial insurance companies of modern times that cannot be overlooked. When the data of the Life Insurance Facts Book (1999) was analyzed it was found that almost 74% of their funds were invested in government securities, corporate bonds, mortgage etc all of which involve Riba/interest. 21% of the funds were invested in stocks. Since the nature of stock is unknown so we cannot be sure whether the nature of the stock is within the purview of Islam or not. A meager 5% of the funds were found to be invested in the real estate.
Where the property and casualty insurance companies are concerned a whopping 77% of their funds were found to be invested in forbidden ways such as bonds that involve Riba. 20% was found to be invested in stock the nature of which is again doubtful.
So is the duty of every Muslim to realize what is being done with the money that he hands over to the insurance companies. In a way, the policy holder pays money to a financial intermediary, i.e. the insurance company to be invested in un-Islamic ways and it will be through these un-Islamic means that the policy holder will be receiving his money back. So in other words, buying insurance policies is as much a sinful act as investing money in a haram way, directly. It is somewhat similar to a person who sells grapes to another person to earn profit, knowing fully well that the grapes will be used in manufacturing wine.
Keep Me In Your Prayers.