Life insurance (or life assurance) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policy holder). Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. The policy holder typically pays a premium, either regularly or as one lump sum.
It has generally been accepted as a legal contract by all Maraje.
For example, Ayatullah Khui (RA) stated about insurance in general:
748. Insurance means that a person may give to another person or company a fixed amount every year, without claiming any return for it, but it may be stipulated that if, for example, his person, shop, motor car or house sustains any harm, the other person or company would compensate him for the loss incurred, or recover the harm, or arrange for his medical treatment. Such a transaction amounts to a gift for which compensation has been paid and, if the body or property of that person meets harm, it is necessary for hte other party to meet his obligations in accordance with the agreement and there is no harm in receiving money by him on this account.
Articles of Islamic Acts (abridged), 1985, p. 219