Is Medical Insurance Allowed in Islam?!?

 Is Medical Insurance Allowed in Islam?!?
(NOTE: This is a question written to and answered by a qualified scholar and not a question written to or answered by ‘AskAzizah.com’.)   

QUESTION (Source: http://abdurrahmanorg.wordpress.com/2010/07/08/he-fears-that-if-he-does-not-have-health-insurance-he-will-become-bankrupt/) :-
“Health care in the US where I live is very expensive, and if I do not have health insurance they will not treat me. If I want to pay for my own health care, I will go bankrupt and may even end up in prison. Is this considered to be a valid excuse for taking out health insurance, which is a form of gambling, given that there is no Islamically-acceptable form of insurance and I cannot afford to pay for health care for myself, my children and my wife in the way that is usual in some other countries?”(Question to Shaykh Muhammad ibn Saalih al-‘Uthaymeen)

ANSWER:
“Cooperative insurance is sometimes described as the lawful alternative to commercial insurance. In what ways do the two types differ? And what is it that makes commercial insurance forbidden and cooperative insurance permissible?” (Question to Shaykh Muhammad ibn Saalih al-‘Uthaymeen)

The Shaykh, may Allaah preserve him, answered as follows:

*Answer #1:-
“So long as the man knows that this is a form of gambling, this is not permissible because it is of the works of the Shaytaan. He should rely on Allaah and put his trust in Him, because whoever puts his trust in Allaah, Allaah will suffice him, and whoever fears Allaah and keeps his duty to Him, He will make a way for him to get out (of every difficulty). So it is not permissible for him to get involved in insurance.”

We have already explained that the reason why health insurance is like a form of gambling is that a person pays a sum of money which becomes the property of the insurance company; if he falls sick or has an accident he will benefit, otherwise his money is gone. Moreover, the benefits he gains may be equal to what he has paid, or they may be more, or less. This involves jahaalah (buying something sight unseen) and undue risk, or consuming wealth unlawfully. It also means that one of the two parties will suffer a loss. I wish that some of the Muslims or wise people would set up cooperative insurance institutions that are in accordance with Islamic sharee’ah, the basic idea of which would be for people to cooperate in making payments to a specific account (that is not owned by any third party), so that if any one of them falls sick or has an accident, he will be compensated, with the consent of his partners. There would be nothing wrong with paying a salary to those who take care of this account, or with investing the money in another company according to a certain level of profit. And Allaah is the source of strength.

*Answer #2:
“The term “Coopertive Insurance” does not mean compensation, it only means mutual cooperation in times of affliction and accidents. As for commercial insurance, the aim of it is profit and it is a form of gambling, which Allah – Almighty, All-Powerful – has forbidden in His Book, and He has mentioned it along with (drinking) Alcohol, Ansab (i.e. idols), and seeking decisions through diving arrows. This is a difference, and this is why you find that when a man lends a person a Dinar and the borrower does not return it until a year or more or less has passed, this will be correct, but if he gave him a Dinar for compensation for each Dinar, this would be wrong and forbidden. So the person’s intention has an influence on changing a transaction from forbidden to permissible.”

Shaykh Muhammad bin Saalih al-`Uthaymeen
Fatawa Islamiyah, volume 5 / page 21

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