Ruling on N.I.S. and voluntary pension schemes.
Assalamu Alaykum, Is NIS insurance halal if one pays voluntarily?
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
Voluntary N.I.S. insurance will not be permissible, as in the case of all non-compulsory insurances.
All forms of insurances prevalent are unlawful (haram) according to Shari’ah, for they have either an element of interest (riba) or chancing (qimar), both of which have been explicitly and sternly forbidden by Allah Ta’ala in the Qur’an and numerous Ahadith.
Allah Ta’ala mentions :
أَيُّهَا الَّذِينَ آَمَنُوا اتَّقُوا اللَّهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا إِنْ كُنْتُمْ مُؤْمِنِينَ () فَإِنْ لَمْ تَفْعَلُوا فَأْذَنُوا بِحَرْبٍ مِنَ اللَّهِ وَرَسُولِهِ وَإِنْ تُبْتُمْ فَلَكُمْ رُءُوسُ أَمْوَالِكُمْ لَا تَظْلِمُونَ وَلَا تُظْلَمُونَ () وَإِنْ كَانَ ذُو عُسْرَةٍ فَنَظِرَةٌ إِلَى مَيْسَرَةٍ وَأَنْ تَصَدَّقُوا خَيْرٌ لَكُمْ إِنْ كُنْتُمْ تَعْلَمُونَ () وَاتَّقُوا يَوْمًا تُرْجَعُونَ فِيهِ إِلَى اللَّهِ ثُمَّ تُوَفَّى كُلُّ نَفْسٍ مَا كَسَبَتْ وَهُمْ لَا يُظْلَمُونَ
“O you who believe, fear Allah and give up what still remains of Riba, if you are believers. But if you do not (give it up), then listen to the declaration of war from Allah and His Messenger. However, if you repent, yours is your principal. Neither wrong, nor be wronged. If there is one in misery, then (the creditor should allow) deferment till (his) ease, and that you forgo it as alms is much better for you, if you really know. Be fearful of a day when you shall be returned to Allah, then every person shall be paid, in full, what he has earned, and they shall not be wronged.” (2:278 – 2:281)
قال رسول الله صلى الله عليه وسلم درهم رباً يأكله الرجل وهو يعلم أشد عند الله من ستةٍ وثلاثين زنيةً
Furthermore, Rasulullah صلى الله عليه و سلم mentions, “If a person consumes a single Dirham of Riba knowingly, it is considered more severe to Allah than 36 acts of fornication.”(Musnad Ahmad)
الربا وإن كثر فإن عاقبته تصير إلى قل
Rasulullah صلى الله عليه و سلم is also reported to have mentioned, “Even if Riba (apparently) increases, it will eventually lead to a decrease.”(AlHakim)
There is gambling in conventional insurance cover:
For example, I pay $100
premium a month, that is $1200 per year. I may get sick and benefit for a cover
up of $30 000 or may even lose my premiums. That is qimaar (gambling).
You stand to lose or gain.
يَسْأَلُونَكَ عَنِ الْخَمْرِ وَالْمَيْسِرِ قُلْ فِيهِمَا إِثْمٌ كَبِيرٌ وَمَنَافِعُ لِلنَّاسِ وَإِثْمُهُمَا أَكْبَرُ مِنْ نَفْعِهِمَا
Allah Ta’ala states in the Holy Quran, “They ask you about wine and gambling. Say, In both there is great sin, and some benefits for people. And their sin is greater than their benefit.” (2:219)
There is Garar (uncertainty) in conventional insurance 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.
Rasulullah صلى الله عليه و سلم advised
نَهَى رَسُولُ اللَّهِ صلى الله عليه وسلم عَنْ بَيْعِ الْحَصَاةِ وَعَنْ بَيْعِ الْغَرَرِ
Rasulullah صلى الله عليه و سلم prohibited from dealing in a future uncertain event. (Muslim)
However, it would be permissible for one to have insurance up to the minimum level required when it is a dire necessity like that of being the law of the land etc.
If one is employed, and is required by the law of the country to pay the N.I.S., then paying and taking benefits from such an insurance will be permissible.
And Allah Ta’āla Knows Best
Mufti Arshad Ali
Darul Iftaa, Jaamia Madinatul Uloom (Trinidad)