Dr. Hatem AHaj M.D Ph.D
The Question of Insurance – Part II
Auto insurance in most (if not all) Western countries is mandated by the state. (Among Muslim scholars, Al-Zarqa and Abdullah Ali-Mahmood argue that automobile insurance must be required even from a Shareeah perspective as it is the way by which people can fulfill their responsibility towards others in the case of accidents, which are an everyday occurrence and whose effects can be very costly.) As was stated above, there does not seem to be any disagreement among commentary scholars that taking such insurance is a type of necessity. Without such insurance one could face heavy fines and even imprisonment. This is what tilts the scale in favor of considering this type of insurance a genuine need or necessity. However, it is important to remember that the principle of necessity requires that one limit one’s indulgence in the normally prohibited act. In other words, one must take the minimum auto insurance required by law, which is usually simply liability insurance. One cannot go beyond that and get, for example, full coverage thinking that such is allowed in this case under the rule of necessity. One must restrict oneself to the minimum necessary to avoid the potential harm of not having the state required insurance.
Other types of insurance may also be mandated by the state. This is especially true if one wants to run specific types of businesses, organizations, schools and so forth. These forms of insurance, when there is a true need for them, would probably fall under the same category as auto insurance. However, again, one must be careful to get the minimum required, as is demanded by the law of necessity. Also, one should be cautious about attempting to benefit from such insurance.
The 2001 session of the Majma al-Fiqh al-Islaami of the OIC discussed the question of health insurance. They all seem to agree that health care is a “necessity of life.” However, with the exception of one author, they did not discuss in detail the question of resorting to health insurance as a type of necessity or in a manner that is most relevant to the situation in the West or the United States. Some of the authors, such as al-Dhareer, only considered health insurance as a form of governmental or social insurance, which is true for the majority of the countries of the world but not for the United States. The one exception to that tone was the paper by al-Qaadhi Mujaahid al-Islaam al-Qaasimi of India, a non-Muslim country, who, as noted above, argued that health insurance is a necessity for Muslim Americans.
There is no reason here to go into details concerning the health care situation in the United States—being somewhat unique in that there is virtually no universal health care for its citizens. For Muslims and non-Muslims alike, there is a true crisis. Health insurance in the United States is costly and health care is even costlier. Hence, by 2001, 43 million Americans were without any health insurance—mostly because they just could not afford it. Medical bills are the reason for almost 50% of all bankruptcies. (Incidentally, insurance is not always the solution to this “necessity.” Norton’s Bankruptcy Advisor stated, “The bankruptcy courts are populated not only with the uninsured, but also with those whose insurance does not cover all the financial consequences of their medical problems.”) In the face of this type of situation, it is perhaps with least reserve that a Muslim scholar can say that medical insurance is a necessity for Muslims in the United States, as al-Qaasimi clearly stated.
However, once again, saying that such a state is one of necessity does not mean that one simply goes out and gets any type of medical insurance available. The principle of necessity requires that one minimize the normally forbidden act to the best of one’s ability. Hence, many Muslims would be facing different possible scenarios in the United States concerning their need to indulge in health insurance and it is incumbent upon them to determine which is best from an Islamic perspective.
For example, here are some scenarios that Muslims face in the United States with respect to medical insurance:
Scenario A: The Muslim works for a non-Muslim company. In many cases, the employee is offered a number of health care packages. Obviously, if the Muslim is taking health insurance in the name of “necessity,” he should seek the package that is most consistent with the principles of necessity.
In some cases, the employer offers some form of comprehensive medical insurance as a free benefit, with the employee paying the premium. In this scenario, the Muslim does not actually have to pay anything for the insurance—although obviously somebody is paying on his behalf, which is also problematic. At the same time, though, the Muslim does not have to accept any of the benefits of the insurance. When the Muslim sees any doctor and the bill is something that he can reasonably pay himself, he has the right to pay on his own behalf and not resort to his insurance company. Again, if one can actually easily afford paying a medical bill, he has no right to invoke the law of necessity. This is an important point to think about it because the lure of saving a thousand dollars or so on a medical bill can be quite strong. But if it is not a true necessity, what right does a Muslim truly have to take advantage of it? That is one thing that is strange about invoking the law of necessity with respect to insurance: One is not concerned about what is happening, in general, but what might happen. But if what might happen occurs and it is within one’s financial means to handle it, how can the law of necessity then be invoked? However, if a true necessity that is beyond his means should ever arise, then he has that luxury and can invoke the law of necessity to benefit from that insurance plan. The point concerning the law of necessity is that it is only to be resorted to when it is truly a great need or necessity. Only when that necessity exists does the Muslim have the right to benefit from the insurance contract that is in its essence forbidden in Islamic law.
Scenario B: The Muslim works for a non-Muslim company that offers some form of health insurance but the employee has to pay for it. However, due to group discounts, this worker will probably be paying less through his work for the same type of insurance than he would if he were to get the insurance on his own, as an individual. Hence, he will be paying less to the insurance company—a principle alluded to in the rules of necessity—by opting for the company’s offer than getting his own insurance, ceteris paribus. Here, the main question the Muslim must answer is whether he feels that he truly needs health insurance. No one can truly predict what medical needs he may need in the future—no one expects to break his ankle while walking down stairs, for example. Given the current health care climate in the United States today, where “the market rules,” a Muslim may be better off guaranteeing that he does have some form of insurance. However, the Muslim should keep in mind the principles outlined in Scenario C below.
Scenario C: For self-employed Muslims, Muslims working at jobs with no medical benefits and even Muslims working at jobs that offer a variety of plans, one of the goals is still to minimize one’s involvement in the action that is normally considered forbidden. In this author’s research, he has found that the best option from a Shareeah perspective is “catastrophic health insurance.” Basically, this is health insurance with a high deductible (such as $10,000 per year down to $1,000 per year). The advantages of this type of health insurance is that it is cheaper (hence, the Muslim has to pay less for this service that if it were not for necessity he would avoid) and the Muslim continues to pay for his medical service until they truly become beyond his means and a case of necessity. Again, the Muslim will have to pay more for medical services through such a scheme but the goal of invoking necessity in this case cannot be simply to escape any payment at all. One should be willing to pay for his needs and resort to insurance only when absolutely necessary. If this is not the approach that is taken, then the rules of necessity are not being applied properly.
Scenario D: The last case to be discussed here is a seemingly healthy Muslim who decides to put his reliance and trust in Allah and not get any form of health insurance because he does not feel comfortable about the legality of health insurance. Could this be considered permissible even though if some great medical emergency should occur it would probably be beyond his means? It would be difficult to say that this approach is impermissible. As noted above, many Americans are following this path and surviving—as after the fact there may be some means to handle such emergency situations. Note that one cannot say that this person should be considered similarly to the one who refuses to eat forbidden meat and, consequently, dies. The person who refused to eat that food would be considered sinful. However, that necessity was direct, restraining and covered explicitly by the texts of the Quran. In the case of not getting health insurance, the analysis has to be quite different. And Allah knows best.
Conclusions and Topics for Further Study
This paper has discussed some of the issues related to insurance in non-Muslim lands. Due to space limitations, only one type of insurance was discussed: “commercial, for-profit insurance.” The starting point of the analysis here was to determine into which category of contracts insurance falls. It was concluded that insurance contracts are not “mutual” contracts or contracts of a charitable nature. Instead, they are mutually onerous contracts that must meet the strict criteria of those types of contracts. Hence, the author concluded in agreement with the vast majority of the scholars that “commercial, for-profit insurance” is forbidden in Islamic law. Among other things, such insurance contracts involve both gharar and riba.
The question of whether such gharar and riba could be overlooked due to a great need for such a transaction was then discussed. It was concluded that the “need” could not justify overlooking the negative aspects of insurance from a Shareeah point of view.
Unfortunately, though, in this world in which Islamic law is not dominant, such cannot be the end of a contemporary discussion on insurance. After the above discussions, the only remaining possibility was whether a Muslim could resort to insurance by invoking the law of necessity. As in all cases of necessity, after meeting the theoretical qualifications for invoking the law of necessity, the individual’s particular situation and abilities will be the final determinant as to whether he is truly in a state of necessity. However, three typical cases were discussed. The first was life insurance. This author could not find no Shareeah justification for resorting to any form of commercial life insurance. Auto insurance was then discussed as an example of state required insurance. It was noted that all scholars seem to agree that taking insurance of this nature is permissible for the Muslim in order to avoid the dire consequences of not having this insurance. Finally, health insurance was discussed—a critical issue for those Muslims living in the United States in particular. The point that was emphasized here is that even if one resorts to such insurance as a type of necessity, one should find the form of insurance that will be considered the most consistent with the guidelines of the Shareeah. In particular, even in cases of necessity, one must resort to the minimum of what is required to meet one’s necessities. One is not free to go beyond that minimum. Hence, a Muslim should seek a policy that allows him to pay for his medical needs when he is able to and to resort to said policy only when a true state of necessity arises.
There are a number of issues that fall beyond the scope of this paper. However, it is hoped that the scholars of Islam will take up such topics.
These issues include the following:
(1) There is a small but growing movement in the United States demanding universal health care. One of the issues that the scholars are discussing is the extent and role that Muslims should play in the political process in the West, such as in the United States. In this case, providing health care for all citizens could be considered a maroof (مفروف) that Muslims may have the right to work for and which can remove them from part of the state of necessity that they find themselves currently in. Does this mean that Muslims should or must work for such a change that would relieve them from invoking the law of necessity even in a non-Muslim environment? This is a topic that shall be left to those who are specialized in this discussion.
(2) A very important topic of discussion for the major Islamic organizations is the possibility of establishing truly Islamic insurance companies in the United States or in the West as a whole. This discussion could start with a detailed study of the current laws governing insurance companies at the present time. Obviously, this company would require a large financial investment, beyond the ability of individuals on their own.
(3) There should be a detailed discussion of the different types of insurance available in the West to determine which of the options is best in the light of the Shareeah—the lesser of the evils, so to speak. For example, with respect to health insurance, there are traditional health insurance, HMOs, PPOs, and so forth. There should also be a study of the current mutual insurance companies in the West to see if they are closer to the Islamic framework.
(5) There also needs to be an in-depth discussion of insurance when it is secondary to the contract itself. For example, when leasing a vehicle, the lessee will be required to acquire full coverage insurance for the vehicle. Does that void the entire contract from a Shareeah perspective or could that possibly be considered a case where the contract is sound but the particular condition is considered void? If it is the latter, how does something of that nature work in a non-Islamic environment like the United States?
(6) To what extent may a Muslim employer provide insurance benefits to his employees, be they Muslim or non-Muslim?
هذا والله أعلم