Dr. Monzer Kahf, a prominent economist and counselor states: There are two conditions for the permissibility of an insurance contract: 1. it must not be interest-based and 2. the insured thing must be permissible. These conditions are satisfied in disability insurance.

Of course, there is another opinion which believes that all kinds of insurance are not permissible on the basis that insurance involves a great deal of ambiguity (Gharar). But I think this other view does not have sufficient evidence for prohibition and does not offer any real alternative. Insurance is a new contract that was not known during the era of development of Shari`ah known contract in Fiqh, it is useful or even very often necessary, the amount of ambiguity in it is bearable and end with a clear process of settlement and clarity and it does not violate any of the axioms of Shari`ah, of course with the above mentioned two conditions.