My employer is deducting complusory medical and life insurance from my salary. Is it permissible for me to accept this?
Answer:
In the Name of Allah, the Most Gracious, the Most Merciful.
All forms of conventional insurance, including life and medical insurance, contain elements of riba (interest) and qimar (gambling), which are explicitly prohibited by the Holy Quran. Therefore, it is not permissible to buy an insurance policy.
If it is compulsory to have medical or life insurance for your job, you should look for an alternative job. If however you cannot find another job, there is scope for you to work there; and you cannot be held responsible for holding an insurance policy in this case (as you are compelled to do so by your employer). However, if the insurance company ever pays you, it will only be permissible for you to take the amount that you paid as premium. More than this amount will not be permissible for you and you must dispose of any amount you get above the premium that you paid by giving it as away (to eligible recipients of Zakat) as charity without the intention of getting rewards.
If it is compulsory to have medical or life insurance for your job, you should look for an alternative job. If however you cannot find another job, there is scope for you to work there; and you cannot be held responsible for holding an insurance policy in this case (as you are compelled to do so by your employer). However, if the insurance company ever pays you, it will only be permissible for you to take the amount that you paid as premium. More than this amount will not be permissible for you and you must dispose of any amount you get above the premium that you paid by giving it as away (to eligible recipients of Zakat) as charity without the intention of getting rewards.
(See: Fatawa Usmani: 3/335)
And Allah knows best.
Mufti Faizal Riza
27/9/2011