All conventional insurance policies and schemes contain elements of interest, gambling and Gharar (uncertainty), that are forbidden in shariah.

There is interest in conventional medical aid cover:

Take for example I take out a medical cover and pay a premium of R100 a month. If something happens to me in the second month, and the bill came to R10 000, the medical insurance company is obliged to pay the R9 900 excess on my behalf. I paid only R100 and get a legal right of more than that amount. That is riba and interest. You are getting something in lieu of nothing. It is incorrect to assume that the medical aid company provides medical services. The official client of the hospital is the patient and not the medical aid company. If the medical aid company does not pay the bill, the patient will be responsible for the bill. Interest is clearly Haram.

There is gambling in a conventional medical aid cover:

For example, I pay R100 premium a month, that is R1 200 per year. I may get sick and benefit for a cover up of R50 000 or may even lose my premiums (in the event that I do not fall ill, or due to defaulting in the terms and conditions of the medical scheme). That is qimaar (gambling). You stand to lose or gain.

There is Gharar (uncertainty) in conventional medical aid cover:

Likewise, my premiums are in lieu of an uncertain event of the future. If I get sick, the company will pay and if I don’t get sick, then they won’t pay. This is gharar (uncertainty). I don’t know if I will get sick or not and to what extent.

Therefore, to voluntarily subscribe to become a member of a medical insurance company and derive benefits from it will be impermissible.

However, if one is required to subscribe to medical aid due to policy of the company he works for, then the Ulama have given the leeway and have considered it permissible for such a person to subscribe to medical aid and he may use the benefits of the medical aid scheme.

If one is compelled to subscribe to insurance and other such policies such schemes due to government law, it will be permissible to subscribe to such policies, but in this case he should only utilize its benefits to the amount of premiums that he had paid.

Similarly, voluntary hospital plans will also be considered to be impermissible due to it containing elements of interest gambling and Gharar (uncertainty), that are forbidden in Shariah. The only difference between medical aid and hospital plans is that medical aid covers for both in-hospital treatment and day to day necessities such as medication and medical checkups whereas hospital plans only provides cover for in-hospital treatments.

AND ALLAH ALONE IN HIS INFINITE KNOWLEDGE KNOWS BEST

ANSWERED BY: Mohmmad Anas Khan 

CHECKED AND APPROVED BY: Mufti Muhammed Saeed Motara Saheb D.B. 

Islamic Date: 27 Jumaadal Ula 1440 - Date: 3 February 2019