Insurance and Medical aid

Q: I recently read an article which claims that it is permissible for a Muslim to take out a medical aid contract. The article explained that if a stipulated monthly fee is paid to the medical aid company in return for which they assume responsibility for the client’s hospitalization or medical expenses, it will be permissible.

The reason for this medical aid contract being permissible in Shari’ah is that it is regarded as an ijaarah contract (i.e. hiring of services) between the member and the medical aid scheme. The ijaarah works in this manner that the member pays a fixed and mutually agreed amount monthly, and in exchange, the scheme takes responsibility for his treatment and wellbeing.

The article also stated that the medical aid scheme can be compared to hiring the services of a barber and a wet nurse. In many villages of India, it is a common and well-known practice for a family to give the barber a stipulated amount of grain or cash at the time of harvest. In exchange, the barber takes responsibility to cut the hair of the family whenever they wish during the year. In this case, although the number of haircuts that he will give to the family is unknown, this ambiguity is tolerated and overlooked as it does not lead to any dispute.

Q: A person wishes to take out third-party insurance. He claims that this form of insurance is permissible because the insurance company will not pay him anything in the event of an accident but will rather pay out the third party. Is third party insurance permissible?

Q: Is an income benefit/provider insurance policy allowed whereby one will receive an income if disabled and cannot work. At the age of retirement the policy will lapse with no benefit.

Q:

1. Are all forms of insurance haraam in the west? If a person doesn’t have car insurance in a western country and they have an accident, they have to pay $10,000 to cover the costs of not only their own vehicle but the other vehicle if it is their fault? Where can a Muslim who doesn’t have insurance, get all that money from?

2. Is medical/dental insurance haraam in the west? There are Muslims in the west that live with their elderly parents and they always have to go to hospital and if they didn’t have medical insurance, they would have to pay so much thousands of dollars of money that they simply wouldn’t have it. Where would they go to get their medical treatment. Would they do nothing?

3. Many people say that when you earn money in the west and go to banks to withdraw that money, that money is interest money which the bank runs on so you can’t do anything?

Q: I had an accident and in a claim I received some money from the insurance company of the other party and there is some amount of injury as well but I didn't get any injury.

I just wanted to now whether I can use that money or not. If no, can I give that to anyone who is in need and not eligible for sadaqa?

Q: The situation is as follows:

A person crashed a car of the owner by hitting a railing. The owners insurance was cancelled. The person drove off as no police report was needed. The owner of the car is saying you can either pay $1000 for the car and keep it or pay for the damages because the person is not able to get it renewed with his insurance. The owner had been paying $200 a month for it for about 4-5 years. The person is buying the car from the owner and taking it to another city. In the other city he will get the car safetied in its current condition and get insurance on it. He will then claim the car so that insurance can pay for the damage to fix the car. All the while he will be paying $150-200 for the car monthly in insurance. Is this correct for someone to do or is it haraam for someone to do that? One other point is he can pay insurance the full yearly amount upfront which is around $2400, and he may get 2-3 grand back for the car which they may treat as a write off.

Q: Are we as transporters permitted to take insurance to cover goods in transit?

Q: Is it permissible to buy a life insurance policy, not so that my heirs can benefit from it; but merely to cover inheritance tax/estate duty that is so exorbitant that due to not having so much cash funds in the estate, essential assets such as the house in which the heirs live in has to be sometimes sold just to pay the estate duty? The heirs will be instructed that after paying the duty, the surplus must be given away in charity without intention of reward.

Q: In business, we sometimes suffer great losses when our debtors fail to pay us. To secure ourselves against these losses, we take out credit guarantee (CGIC).

How it works is that I tell CGIC, for example, that the general amount of money owed to me by my debtors at any given point is approximately R40 million. They will then provide me with credit cover and charge me 0.6% p/month of R40 million. When any of my debtors fails to pay me, then as soon as 90 days pass, I issue a letter of demand to the debtor and also inform CGIC. If the debt is not settled by 120 days, CGIC takes over the debt and tries to get the money from the debtor through legal means, etc. They then pay me 70-75% of the debt amount.

Because CGIC is a form of insurance, they also charge an excess i.e. they will not cover the first claim up to R200 000 per annum.

Is credit guarantee (CGIC) permissible in Islam?

Q: In Islam, is it permissible for a Muslim to have funeral cover?