Using money and calculating zakaat from a life insurance payout

Q: I had taken out a life insurance policy with a dread disease cover many years ago. (I call that my pre-hidayat days). I have now been paid out part of the money for a dread disease, which is part of the life cover. Can I calculate all the premiums I paid over the years and take the money out of the payout as halaal money for myself? Can I use the balance of the payout for Income Tax payment. I would then cancel the policy. 

Also, what are the zakaat implications regarding this money if it is halaal. Do I need to calculate zakaat from the time I started paying the premiums or not?

A: You can use your premiums and some Ulama have allowed paying taxes etc. with such money.

You will pay zakaat for whatever you had contributed.

And Allah Ta'ala (الله تعالى) knows best.


Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)