Learn Icelandic: Er allt í lagi?

The phrase í lagi literally means "in order" or "in shape." The word lag has a few meanings, but here it refers to something being the way it should be. Together with allt (everything), the whole phrase allt í lagi is the standard way to say "okay" or "alright" in Icelandic.

Why is the word for "everything" written as allt?

Allt is the neuter form of the word allur (all). In Icelandic, when you are talking about "everything" in a general, abstract sense—without referring to a specific masculine or feminine noun—you always use the neuter form.

How do I answer this question if everything is indeed okay?

You can simply reply by saying Já, allt í lagi (Yes, everything is okay) or just repeat Allt í lagi as a statement.

Can I use allt í lagi just like the English word "okay"?

Yes! It is very versatile. Just like in English, you can use allt í lagi to ask if someone is hurt, to check if a situation is fine, or to agree to a plan (like saying "Okay, I will do that").