Dear friend, we all know that there are many types of Insurance, one of them is called group insurance. What is this insurance and what is the ruling of Islamic Sharia will be highlighted today, inshallah.
What is Group Insurance?
The insurance which is provided against the possible future accidents of government or private employees as well as officers and employees is called group insurance. A certain amount of money is compulsorily deducted from the monthly salary of every employee and kept as insurance premium. If an employee is involved in an accident at any time during the year, he/she is provided with comprehensive compensation including medical treatment from the insurance fund. Which is much more than his savings. If there is no peril during the year, the amount deducted as premium is considered cancelled. New insurance starts next year. It is called group insurance.
Group insurance is of two types:-
- Group temporary Insurance
- Group Term Insurance
Group temporary Insurance:-
Under this insurance, if a group insured member dies within the contract period, the Sum Assured is paid as per the terms of the contract. No post term benefits are provided in this insurance.
Advantages:-
Post Term Benefit:- No post term benefit is provided in this insurance.
Death Claim:- On death the sum assured is paid as per the terms of the contract.
Plan Parameters:
- Minimum age of insured is 18 years and maximum 59 years.
- Minimum number of members in group insurance is 50, maximum is unlimited.
- The contract period is minimum 01 year maximum 3 years.
- Method of Paying Premiums, Annually.
- Maximum age is 60 years,
- Loan facility of insurance:- No,
Insurance Number: As per proposal.
Profit Commission: At the end of the contract period of 03 (three) years, if there is a profit, a certain part of the profit is paid back to the concerned organization as per the terms of the contract.
Supplementary Benefits: Accidental Death and Dismemberment Benefit (PDAB), Accidental Death Double Claim Insurance Benefit (DIAB) and Hospital Health Insurance Benefit.
Group Term Insurance:
The sum assured is paid at the end of the policy term or on premature death within the term.
Group term insurance is of three types:-
(a) Group term insurance with profit and without profit.
(b) Group Variable Term Insurance:
- 25% post term benefit of sum assured and 100% of sum assured on death.
- 50% post term benefit of sum assured and 100% of sum assured on death.
- 100% post term benefit of sum assured and 100% of sum assured on death.
(c) Group Term Insurance Premium Refundable:-
- Tenure 05 years Premium refund 50%
- Tenure 10 years Premium Return 75%
- Tenure 15 years 100% return of premium
Advantages:-
Post Term Benefits:
(a) Group Term Insurance:- Sum Assured + Bonus (in case of insurance with profit).
(b) Variable Group Term Insurance: At the end of the contract period.
- 25% sum insured + bonus (in case of insurance with profit)
- 50% sum insured + bonus (in case of insurance with profit)
- 100% sum insured + bonus (in case of insurance with profit)
(c) Group Term Insurance Premium Refundable: At the end of the contract period.
- 50% refund of premium paid
- 75% refund of premium paid
- 100% refund of premium paid
Death Claim Benefits:-
Sum Assured + Bonus (Refund of Insurance with Profit)
Plan Parameters:
Minimum age of insurance enrollment is 18 years and maximum age is 59 years.
The number of members of group insurance is minimum 10 years maximum unlimited.
The insurance period is minimum 2 years maximum
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Method of Paying Premiums, Annually.
Maximum age of expiry is 60 years.
Other Benefits of Insurance
- Paid price
- full price
- Loan facility
Ruling on Group Insurance in Islamic Sharia
An analysis of all norms and practices of group insurance has revealed that the authorities compulsorily deduct the insurance premium from the salary of all employees. It is not valid for authorities. In addition, the money deducted from the employees' salaries is not returned to them, thus the activity is regarded as extortion. So group insurance is not Shariah compliant.
However, in case of danger to an employee, whatever is paid in excess of the principal amount deducted shall be treated as profit of the provident fund for him. Therefore it is lawful for him to accept and enjoy it. But even in this case, it is better to give charity to the poor without the intention of reward without spending extra money.
Reference:- Fatwa Usmani 3/337. https://www.somadanmedia.com
