Life Insurance Fund without usury: Gold Application in Iran’s Inflation Hedging

Life Insurance Fund without usury: Gold Application in Iran’s Inflation Hedging Abstract The influence of life insurance in Iran is low compared to the world average. Chronic inflation and a sharp decline in the value of national currency are among the important reasons for the failure of life insurance policies in Iran. In life insurance contracts that are announced by Iranian insurers, a fixed interest rate is considered for the final capital, but according to statistical data relating to past years, the returns are not able to cover inflation. This study, while analyzing these types of contracts, shows that gold coins can be used as an inflation hedge for life insurance. This action, in addition to improving the effectiveness of life insurance, eliminates the usury nature of these types of contracts. The data processing in this study was based on an ARDL econometric method. Keywords: Inflation, Life Insurance, Hedging, Islamic finance. JEL Classification: G22, G40, E31, C22.