The Agricultural Engineers Association provides a variety of services to its members including health insurance. In light of this, cooperative insurance companies as well as commercial insurance companies have submitted financial proposals. What is the ruling of Sharia on each type? In other words, which type is fittest in light of the provisions of Sharia?
Answer:
Praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
All forms of commercial insurance are prohibited, but since you have to choose between cooperative and commercial insurance, We (Iftaa` Department) recommend cooperative insurance for it is the lesser of two evils. This type was actually considered permissible by the Islamic Fiqh Academy emanating from the Organization of Islamic Conference. However, it should be made clear to the insured that the insurance payments are a donation which the insurance company spends in accordance with the provisions of Sharia Law. And Allah the Almighty knows best.