Q: Some national companies and firms offer (Part No. 15; Page No. 293) medical insurance to their employees and their families. To provide this service, they make an agreement with some national hospitals. This agreement is as follows: 1- The company pays the hospital a fixed monthly amount of 100 riyals for each employee, regardless of the number of times they visit the hospital to have treatment. 2- The hospital is responsible to treat the employees, giving them the necessary medications and performing surgery for them when necessary. It is important to mention that in some months the hospital spends more than 100 riyals on treating an employee, especially when the person has an operation. At other times, an employee may not visit the hospital at all and thus, does not benefit from the 100 riyals or they may benefit only from a small amount. The question now is: First, is this type of medical insurance Islamically permissible or does it involve Jahalah (sale with lack of knowledge) and Gharar (fraudulent transaction where details about the sold item are unknown or uncertain)?
does this kind of insurance fall under permissible Ji`alah (payment for a permanent job, salary/wage) as stated by some researchers in Al-Buhuth Al-Fiqhiyyah Al-Mu`asirah Journal (Contemporary Jurisprudence Research Journal, issue no. 31)? (Part No. 15; Page No. 294) Third, what are the characteristics of lawful
cooperative medical insurance
The transaction mentioned in the question falls under the category of prohibited commercial insurance. It involves Gharar, Jahalah and unjustly taking people's money. The permissible cooperative medical insurance is to establish a charity fund that collects donations from beneficent people to help needy and sick people without the donor expecting any financial benefit from it. Giving the money to the fund should only aim at helping the needy and hoping for the reward from Allah (Exalted be He). May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.