Ruling on Medical Aid

1. Medical aid is an insurance product.

2. Insurance, however, operates in two modes:

2.1 Commercial insurance:

2.2 Co-operative insurance:

3. There is broad concurrence between the ‘Ulama that commercial insurance as described above is not permissible. This is on account of the very prominent presence of the element of gharar (uncertainty) in the contract.

4. As for co-operative insurance, there is an equally broad scholarly consensus on its permissibility as outlined in the International Fiqh Academy’s Resolution no. 200 (6/21) and other sources.

5. In South Africa medical aid is regulated by the Medical Schemes Act no. 131 of 1998. A study of the operation of medical aid under this act reveals that it is unequivocally an example of cooperative insurance. Hence, any medical aid scheme registered under the Medical Schemes Act in South Africa is permissible in our estimation.

6. Do note however that there is a difference between medical aid and medical insurance. Medical insurance is generally not registered under the Medical Schemes Act and does not operate on a co-operative basis. It operates instead on the contractual basis of commercial insurance.

والله تعالى أعلم

And Allah knows best.