[50-16] And indeed We have created man, and We know whatever thoughts his inner self develops, and We are closer to him than (his) jugular vein, .
Is Allah (SWT) "physically" close to humans or their jugular vein?
Adopted from Mariful Qur'aan by Mufti Mohammed Shafi (RA)
وَلَقَدۡ خَلَقۡنَا ٱلۡإِنسَـٰنَ وَنَعۡلَمُ مَا تُوَسۡوِسُ بِهِۦ نَفۡسُهُ ۥۖ وَنَحۡنُ أَقۡرَبُ إِلَيۡهِ مِنۡ حَبۡلِ ٱلۡوَرِيدِ
Translation (50-16): And indeed We have created man, and We know whatever thoughts his inner self develops, and We are closer to him than (his) jugular vein, 
The preceding verses purported to quell the doubt of those who denied the possibility of Resurrection and who thought that raising the dead was inconceivable. As a result, the unbelievers drew a false analogy between their finite knowledge and power and the infinite knowledge and power of Allah. Therefore, the perplexity arose in their mind: 'after we die, disintegrate, with our organs torn apart, our bodies reduced to particles of dust and scattered or spread all over the world, how is it possible to gather them together and recompose them back into our original shape and bodies?'
The preceding verses responded that the Divine knowledge is all-encompassing and He knows every single particle of the universe, and therefore it is not difficult for Him to recollect these particles. The same subject has been further elaborated in the present verses by declaring that Allah not only has the complete knowledge of man's scattered particles, but He also has the full knowledge of all thoughts that cross the mind of man. The verse explains the reason for that: Allah is nearer to him than his jugular vein, on which is dependent his very life. Therefore, He knows man's conditions and circumstances more than man himself.
Allah is Nearer to Man than his Jugular Vein: An Analysis
The concluding part of verse  says: نَحۡنُ أَقۡرَبُ إِلَيۡهِ مِنۡ حَبۡلِ ٱلۡوَرِيدِ (We are closer to him than [his] jugular vein). The 'closeness' in the verse, by consensus of scholars, refers to "nearness in terms of all-encompassing knowledge" not in terms of physical closeness. In this manner, the verse means that Allah's power and knowledge has so encompassed man from within and without that His power and knowledge is nearer to him than his own jugular vein.
The term warid [pl. awridah] in the Arabic language are animal veins which supply blood to the entire body. Medically, there are two types of veins:  the veins that emerge from the liver and supply pure blood to the entire human body. Medically, only these veins are referred to as warid [pl. awridah]; and  the veins that emerge from animal heart and supply the subtle vapor of blood to the entire human body which in medical terminology is referred to as ruh [soul]. These veins are called in Arabic shiryan [which actually refers to an artery]. The first type of veins is thick-walled and the second type is thin-walled.
The word warid in the above verse does not necessarily apply to the vein that comes from the liver in the medical sense. In fact it could well apply, in the literal sense, to the vein that comes from the heart because in that too a type of blood circulates. As the purport of this verse is to show that Allah possesses full knowledge of all thoughts that cross the mind of man, the literal sense of the term seems more appropriate. Nevertheless, whether the word ioarid is taken medically in the sense of a vein coming from the liver or in the sense of an artery coming from the heart is immaterial. In both cases the living creatures' life depends on it.
Ifthe veins or arteries are cut, they lose their soul and die. In short, Allah encompasses complete and full knowledge about everything of man, because He is 'closer to him than his neck-vein.
According to the Honourable Sufis, here the term qurb (closeness) goes beyond the concept of nearness in terms of knowledge. It is a special type of ittisal [contact or bond or relationship between Allah and His creation, including man who is placed at the centre of the wonderful universe], the reality and nature of which is not known to anyone, but it does necessarily exist bila kaif "without how" or indescribably. Various Qur'anic verses and authentic Prophetic Traditions bear ample testimony to this fact. For example, the Qur'an commands: وَٱسۡجُدۡ وَٱقۡتَرِب) (and bow down in sajdah, and come closer .... AI-'Alaq: 18) This is just like what the Holy Prophet (Sallaho Alaihe Wassallam) is reported to have said: "The closest that a servant can be to his Lord is when he is in prostration. Therefore, make abundant supplications (i.e. while prostrating) ." Another Tradition reports that the Holy Prophet (Sallaho Alaihe Wassallam) said: "When My servant performs supererogatory prayers, he attains proximity to Me." On the occasion of migration to Madinah, the Holy Prophet (Sallaho Alaihe Wassallam) said to Sayyidna Abu Bakr (RA) " إِنَّ ٱللَّهَ مَعَنَاAllah is with us. (9:40)" Holy Prophet Musa (AS) said to the children of Israel: إِنَّ مَعِىَ رَبِّى "My Lord is with me." (26:62)
This qurb [nearness or proximity to Allah], which man attains through nearness of obligatory and supererogatory works and through his efforts, is reserved exclusively for a believer. Such believers are called awliyaullah. [the friends of Allah: they are those whom Allah has chosen as His friends]. This special bond with Allah is different from the general relationship between Allah and man, whether believer or non-believer. In brief, the above verses and narrations bear testimony to the fact that man has a special type of proximity to his Creator and Master though its reality and nature cannot be perceived. Maulana Rumi (RA) has versified this concept thus:
The Lord of the people has a special contact with the people which is beyond one's perception and has no other example.
This nearness and proximity cannot be perceived by the ordinary sensation of physical sight, but it is attained through farasah of 'iman [perspicacity through faith]. Tafsir Mazhari interprets qurb and ittisal in this verse in the same sense. We have learnt earlier the interpretation of the majority of the commentators that it is not physical proximity, but rather the all-encompassing, full and complete knowledge of Allah. Apart from these two interpretations, Ibn-Kathir interprets it in a third way. He says that the pronoun "We" does not refer to the "Being" of Allah, but to His angels who are all the time with man. They know man's soul so closely that man himself is not so well aware of it. Allah knows best!
فَلَوۡلَآ إِذَا بَلَغَتِ ٱلۡحُلۡقُومَ (٨٣) وَأَنتُمۡ حِينَٮِٕذٍ۬ تَنظُرُونَ (٨٤) وَنَحۡنُ أَقۡرَبُ إِلَيۡهِ مِنكُمۡ وَلَـٰكِن لَّا تُبۡصِرُونَ
Translation (56-83:85): So why (do you) not (interfere) when the soul (of a dying person) reaches the throat,  and you are watching?  And We are closer to him than you, but you do not perceive. 
The preceding verses proved two facts through rational arguments and by swearing an oath by the falling stars:  that the Holy Qur'an-is the word of Allah. Neither Jinn nor devil can ever tamper with it. Everything it contains is the truth; and  one of the most fundamental articles of faith enshrined in the Qur'an is the Day of Resurrection and Reckoning. Towards the end of the passage, it is mentioned that the infidels and idolaters, in spite of clear arguments and evidence, reject life after death.
Their denial of Resurrection by the unbelievers, in a way, amounts to a claim that their lives and souls are under their own control, and they have a say in the matter of life and death. In order to refute this assumption, the above verses give the example of a dying person. When the soul reaches his throat, all of his near and dear ones look at him and express their desire that he may live longer, but none of them is able to intervene and save his life. All the people around him seem absolutely helpless. However, Allah is nearer to the dying person than the people around him even though they are unable to see Him. In other words, that is, He is nearer to him in terms of knowledge and power. He is fully aware of the person's inner and outer conditions and has complete control over him.
In short, it is not within people's power to get together and save a soul or life. Allah is nearer to a dying person than his soul or life. Allah has pre-designated a particular time for the soul to be separated from the body. None can avert it. In view of this graphic picture, the disbelievers are reminded that if they think that they cannot be resurrected after death, and they are too strong to come under Allah's grasp, then they must restore the soul when it has reached the throat and is about to depart from the body or it has already departed and died. If it is not possible to do any of these, how illogical or irrational it is for man to think that he can escape the Divine grasp and reject life after death!