Medical Insurance in Islam
15-2-2001 | IslamWeb
Question:
Today most of the organizations provide total medical coverage to the employees. For this, they pay a certain amount (annually) on behalf of each employee to the medical insurance company; they have their contract with.
Is it permissible for Muslim employees to avail of such services? As far as I understand, any type of insurance is prohibited in Islam.
Answer:
All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad 
is His slave and Messenger.
Medical insurance, like all other types of insurance, is forbidden. In fact, it includes high risk and it is a way of collecting money from people without a legal right. Suppose, for instance, payments were taken from you monthly for a long period of time and you never needed any treatment; so your payments did not benefit you at all.
On the other hand, suppose after signing the contract you immediately fell ill and the payment for your treatment is equal to ten years of premiums for an employee like you. The insurer is obligated by contract to pay this cost; such a contract is the same as gambling which is forbidden in Islam.
So, we advise you to avoid such forbidden contracts and to ask Allah for health and well-being.
Nonetheless, if you work in a company and the company insures on behalf of its workers, you are not responsible for what is being practiced by your company since no one is responsible for other's acts.
If you are able to advise the proprietor or the manager of that company not to become involved in insurance, then you should do so. Doing so is your Islamic obligation.
Allah Says (what means): {You are the best nation produced [as an example] for mankind. You enjoin what is right and forbid what is wrong and believe in Allah. If only the People of the Scripture had believed, it would have been better for them. Among them are believers, but most of them are defiantly disobedient.} [Quran 3: 110]
Besides, Abu Sa’eed Al-Khudri 
narrated that the Prophet, sallallaahu 'alayhi wa sallam, said: "Whoever amongst you sees an evil, he should change it with his hand (i.e. physically), if he is unable he should change it with his tongue (i.e. verbally) and if he is unable, he should change it with his heart (by detesting it in his heart) and that is the weakest level of faith." [Muslim]
You should not include yourselves as the beneficiary of this policy and should avoid it. To our knowledge, one can avoid being included in his company's group insurance policy.
You may know that a company does not pay premiums for individuals; rather, it pays a certain amount for groups of workers. However, as a Muslim, you are obliged to avoid using insurance or dealing with what is forbidden.
If your employment in this company requires you to accept insurance and you cannot avoid it by any means, then you should resign from your job.
You should believe that all means of livelihood are in the Hands of Allah. Allah Says (what means): {And whoever fears Allah - He will make for him a way out. And will provide for him from where he does not expect. And whoever relies upon Allah - then He is sufficient for him. Indeed, Allah will accomplish His purpose. Allah has already set for everything a [decreed] extent.} [Quran 65:2- 3]
But if you believe that leaving the job would cause severe problems that you could not bear, then at least you and your inheritors should not benefit from the money of insurance. You should be satisfied with what you have earned by your lawful means; Allah will bless you and help you; Allah willing.
However, it is correct to use the insurance compensation limited to the amount of money deducted from you without your consent.
Praise be to Allah, in recent time, there are many Islamic insurance companies, as good alternates to the interest-based insurance companies.
Also, the cooperative system of insurance, which are not based on Riba (interest), though having some objection in the method of implementation, now exists among Muslims.
Allah knows best.