I require your advice please for the office Health Insurance Scheme.
I am working at public quoted company in Sri Lanka. There are is a Health Insurance Policy to all its employees. Below are its features.

1) It is open to all employees under Staff Benefit theme.
2) In order to subscribe to this health insurance policy, company doesn’t deduct any amount from our salary since it is deemed as Staff Benefit.
3) Our company pays LKR 11,000 p.a. to Insurance Company as a premium for the policy.
4) If we are hospitalised, the total claim would LKR 250,000 p.a. Out of which, LKR 150,000 is paid by Insurance Company and LKR 100,000 is paid by my company itself.

If I was hospitalised, can I claim from this scheme under theme of staff benefit?

In the name of Allah, the most Beneficent, the most Merciful.

Answer

The following scheme might work in the following two ways:

1. The government or the employers by law deduct a certain amount from the employee’s salary every month or year. This would not be considered as riba (interest). It is not a form of insurance where premiums are paid and nor there is an element of gambling or interest involved here. Furthermore, in Shariah legal ownership is not established until the individual or a representative does not claim the possession. Hence, when a percentage is cut from the wages of this individual without prior permission possession will not be established; therefore, the money received will be considered as a gift or a bonus. However, the problem here is that the money may be invested by the government or the employer to unlawful businesses like banks, alcohol companies, insurance companies etc… If they invest money into banks or alcohol companies, then although it will be permissible to take the money as the employee did not have a say or any control of the money, it will be preferable to donate it to the poor without the intention of thawaab (reward). (Raddul-Muhtar p.553 v.9)

1. The second possible situation is where the employee undertakes the scheme voluntarily. Mufti Shafee (RA) has written in Nawadir Fiqh, that one should refrain from such voluntary schemes. (Nawadir Fiqh p.325 v.1)

There are three reasons for the impermissibility of this:

1. Interest

The Holy Prophet of Allah Sallallahu Alahi Wasalam has said, “To take one dirham of interest knowingly is worse than committing adultery 36 times.” (Mishkaatul-Masaabeeh p.246 v.1)

2. There is an element of deception. The insurance contract contains uncertainty due to the amount being paid is not fixed and the time it will occur also being uncertain.

The Prophet of Allah Sallallahu Alahi Wasalam has “forbade deception and uncertainty in transactions.” (Sunan Tirmizi p.233 v.1)

3. Gambling

Insurance policies require payment of money, thereafter if the following mishaps were to occur a payment would be made. This is a pure form of gambling.  (Raddul Muhtar p.577 v.9)

Regarding your question, as this scheme is a voluntary one and is similar to a conventional insurance, it will be impermissible for you to undertake such a scheme.

Only Allah Knows Best

Mohammed Tosir Miah

Darul Ifta Birmingham