Thursday, April 21, 2011


This is a weird topic. I had never thought of this (and don't plan on looking into it for myself) but a friend just told me she has a life insurance policy on her parents.

Basically, when they die, she will get like 150 000$. I find this idea a bit creepy... I think if the parents are perfectly OK with the idea, it can be OK for them, but there's something so weird about making money when your parent dies! The sooner they die, the better your investment. The longer they live, the less your investment is worth it! It's like conflicting interest, isn't it?

It still creeps me out! But it did get me thinking that like her, I could stand to invest 50-100$/month somewhere... So I'm looking into my options. I want to keep interest to a minimum in my life (although I do plan on getting a home and will need a loan for that) so I'd like some Islamic options if you can help me out! Stocks are OK Islamicly, right? It's not about interest, but basically investing in a winning business...

Thanks you guys

5 Comentários:

Nikki said...

My husband and I have a life insurance policy together. So, if either of us dies, the other will get $100,000. If both of us die, our son gets the $100,000 but my father is in charge of using it...because 2 year old don't handle that kind of stuff and a trust fund doesn't help until years down the line. It's yucky to think about, but with our son we thought it was a good idea because if my husband dies, I have absolutely no income, and this would hold me until I could find a job. If I die, my husband would not be as bad off, but he would need extra money to pay for daycare, etc. And although I don't know that he'd do it, I imagine a maid/housekeeper would be almost necessary were I to pass away. I do not see him taking the initiative to keep the house up, take care of Noah, and work. (granted, when I worked I did all of the above...but men seem to find it impossible).

Anyway, I don't know anything about investing. But I have seen Islamic financing options that help you buy houses, etc. without loans. Whenever my husband has a stable job and we think we've found 'our town,' we'll look into something like that when it comes time to buy a house. Currently we're moving, moving, moving, renting, renting, renting...

.::Tuttie::. said...

I would get a quote and instead of buying that insurance I would put that money aside every month in a checking account. I would NOT enable online banking, would not get a atm card and would not order checks. THat way if I feel the urge to pull money out I have to go through the inconvenience of going to the bank during their work hours, fill out the form and stand in line.

The moment you can't afford that plan and stop making your premiums they keep that money you have already paid...which is usually the case.

In my scenario at least if you can't afford the monthly plan the money is in your account and still yours. Not a get rich quick scheme but safer than betting on someones life or entering in potentially haraam dealings.

LK said...

There are many kinds of savings accounts. You might want to go that route. No savings account gains enough interest anyway so I doubt it would be too against the rules (Many are less than 1%).

But a checking will work as well. That way you have control over your money. Yes it wont double from investment but you avoid interest.

ellen557 said...

I have my own life insurance plan with my work. I think it's around $150,000? But for me it's vital, I need to be able to know that my family will be okay, you know? And I'd say that her parents are fully aware of the policy and would agree to it. I'd like for my children to do the same if they have the opportunity.

You should definitely start investing or saving sis!

Candice said...

Stupid blogger, I answered each comment and it didn't post!

Nikki: I think it's a good idea to have life insurance too... Just a protection because it really is a huge financial strain to have a spouse die. I now have one included in my insurance with my work so if I died my husband would get 40 000$. It's not much, but enough to pay for burial and my school loan, and give him a few months to figure out a plan to be financially independent without me. I'm glad yesterday he told me he wouldn't let there be debts in my name after I die. :)

Tuttie: I am really really not interested, and not looking into the idea on life insurance on my parents. It's a friend who has done this, and it sounds like a fine idea for them, but I wouldn't.

What I'm looking for is something like you described. Having my money accessible, but not too easily accessible. I'd want to be able to use it for a down payment on a house when the time comes - this is the main thing I want to save for right now. Although I know most of our savings will likely be going toward a trip to Egypt... It's so expensive and money we will simply never see again, but my husband and daughter deserve to see their Egyptian family so it's just something I have to deal with. Really feels like savings are sucked dry as soon as there are any!

LK: I have a very low interest account now for my tiny bit of savings but I think stocks don't use interest at all. They just go up and down based on other factors, and it might be a better investment option in terms of revenue, and also Islamicly. I will look into it though before.

Ellen: Yes, the parents seem fully aware and OK with the idea so it's all good for them. :)

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