The Ruling on Commercial Medical Insurance
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Question:
Honorable Shaykh, he says: What is the ruling on some institutions providing medical care for their employees by contracting with insurance companies for this purpose? And if that is not permissible in the Shari'ah, what is the employee's course of action in that regard, especially since his contract with the institution includes providing him with medical care? And does he bear any sin if he uses this medical insurance?
Answer:
Commercial insurance is forbidden in all its forms, whether medical or non-medical; because it is consuming people's money without right, and because it is a contract involving the unknown and excessive uncertainty (gharar). If a Muslim needs treatment, he is treated at his own expense, whether the cost is small or large; he is treated at his own expense, not at the expense of people, not at the expense of the company. The company does not pay anything from its own funds, from the funds of the participants, from the funds of people; it is injustice. This is injustice to people. An operation may cost a huge amount of money, and all of it comes from the participants without right. This is not permissible. Insurance is not permissible in any of its forms. And the Muslim should rely upon Allah, and if he needs treatment, he is treated at his own expense. Or if his car breaks down or is involved in an accident, he repairs it at his own expense, not at the expense of people, not at the expense of the participants. So the generalization is invalid in all its forms. It is not one of the contracts of Muslims, but rather it is an imported contract, containing excessive uncertainty (gharar), ignorance, gambling, risk, and many harms. Does a person not enter into it?
And if he is forced to enter into it, he pays in order to avert harm from himself, but he does not use it. So if he needs treatment, or needs to repair his car, he is treated or repairs his car or renovates his house at his own expense. He only pays the insurance because he was forced to do so and was prevented from working except by it, so he pays it in the category of averting harm, but he does not benefit from it in any way, because it is injustice.
Honorable Shaykh, he says: What is the ruling on some institutions providing medical care for their employees by contracting with insurance companies for this purpose? And if that is not permissible in the Shari'ah, what is the employee's course of action in that regard, especially since his contract with the institution includes providing him with medical care? And does he bear any sin if he uses this medical insurance?
Answer:
Commercial insurance is forbidden in all its forms, whether medical or non-medical; because it is consuming people's money without right, and because it is a contract involving the unknown and excessive uncertainty (gharar). If a Muslim needs treatment, he is treated at his own expense, whether the cost is small or large; he is treated at his own expense, not at the expense of people, not at the expense of the company. The company does not pay anything from its own funds, from the funds of the participants, from the funds of people; it is injustice. This is injustice to people. An operation may cost a huge amount of money, and all of it comes from the participants without right. This is not permissible. Insurance is not permissible in any of its forms. And the Muslim should rely upon Allah, and if he needs treatment, he is treated at his own expense. Or if his car breaks down or is involved in an accident, he repairs it at his own expense, not at the expense of people, not at the expense of the participants. So the generalization is invalid in all its forms. It is not one of the contracts of Muslims, but rather it is an imported contract, containing excessive uncertainty (gharar), ignorance, gambling, risk, and many harms. Does a person not enter into it?
And if he is forced to enter into it, he pays in order to avert harm from himself, but he does not use it. So if he needs treatment, or needs to repair his car, he is treated or repairs his car or renovates his house at his own expense. He only pays the insurance because he was forced to do so and was prevented from working except by it, so he pays it in the category of averting harm, but he does not benefit from it in any way, because it is injustice.
Source
75-اللقاء الأسبوعي مع الشيخ صالح الفوزان - 04 — archive.org (44:18)
The Arabic text is a machine transcription of the audio recording.