Darul Uloom Trinidad & Tobago

QUESTION:

As Salaamu Alaikum,

Message Body:
Is registering to the national insurance board and paying contributions as a business owner permissible?
As this is insurance would it be regarded like the rest of types of insurance as Haram?

ANSWER:

Wa Alaikum As Salaam,

The National Insurance is not exactly like other types of insurances. In reality, it is a system of taxes paid by workers and employers to the Government in the form of contributions. These are paid primarily so that state benefits can be accessed by individuals which are provided upon death, retirement, unemployment, maternity and disability. Therefore, when these benefits are provided, they are actually on account of what was paid already by the individual and the employer while he was employed.  As such, the individual is benefiting from a halal income.

Generally, National Insurance of the Government does not operate like insurance companies where they invest, pay interest or receive interest to pay-off policy holders. Therefore, it cannot be regarded like the other types of insurances.

Here, in our country it is a law that workers and employers must contribute to National Insurance. Therefore, it is permissible to register to the board and pay contribution as a business owner.

And Allah Knows best

Mufti Waseem Khan

18/01/2018