Is there such thing as Halal Insurance In Singapore?
Note: This is a touchy issue, and may touch the raw nerves of a few people. If you will like to clarify on the matter, do it in a tactful and respectable manner at https://helmihakim.com/insurance/is-there-such-thing-as-halal-insurance-in-singapore/.
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First and foremost, I will like to make it clear that, I try not to touch on this issue, as 70% of my RSS subscribers are Non Muslims riskofhighunsubscriberate, but I will like to offer my transparent perspective on this. (this might be an interesting read for you too)
I am not an ustaz or a religious leader. Neither am I, a scholar or an academician.
…but I do qualify myself, as a Malay/Muslim financial consultant in Singapore. In my 4 years of practice, I have done 4 death claims, and numerous hospitalisation claims. All are Muslims. I talk to people on the ground, every single day on financial planning.
The question that I will like to answer today, is there such a thing as halal insurance in Singapore?
There are many strong views on this, and all are entitled to your opinion. I am offering you mine. You can subscribe to it or you can choose to reject it….but do read on….
1) Takaful Plans
In Singapore, you might have heard about Takaful plans. Takaful plans are offered by 2 entities, a cooperative and a commercial bank.
Unlike Takaful plans in Malaysia, Indonesia or other Muslim countries, Takaful plans in Singapore, is basically an investment plan also known as Investment Linked Policies. It is an investment plan that invests your money in a fund, called Takaful fund. It is a shariah compliant fund and the plan comes with insurance coverage. Should death, total permanent disability or 30 critical illnesses were to strike, halal money from the Takaful proceeds will be given to the beneficiaries.
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Takaful is good, but not for all. This is because, Takaful is an investment plan. A responsible financial consultant, will not recommend an investment plan, to a conservative 50 year old Pakcik (uncle), looking forward for his retirement.
Neither, will he recommend the investment plan, for one who has a short term horizon of say, 5 years or one who is risk averse.
Nor, will he treats Takaful investment plan, as a “one size fits all solution” to all his clients, because Takaful investment plan does not cover many things, example, hospitalisation.
He must educate his clients, that Takaful is an investment plan, that offers coverage and returns subject to the performance of the fund. ifnotyoulosemoneyclientwillfindyoulater
In Singapore, under section 27 of the financial advisors act, a financial advisor must determine the “risk profile” of the client before recommending him, financial instruments. If our client are able to take a bit of risk, Takaful investment plan is the solution to it.
So, if one is risk averse, how do we go about it?
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2) Cooperative insurance is the alternative.
When I recommend a life insurance policy to a client, I will give him choices. How do you want to get yourself covered?
Takaful Investment Plan with coverage? OR….. Cooperative Life Insurance?
There is a fatwa by MUIS, specially for the Muslim community in Singapore, on the permissibility of getting cooperative insurance in Singapore.
https://www.muis.gov.sg/officeofthemufti/Fatwa/Malay-Skim-Insuran-berkumpulan
Excerp from the fatwa,
“(i) Insurans yang ditadbirkan oleh syarikat kerjasama yang dianggotai oleh semua anggota-anggotanya untuk menjaga maslahat mereka dan apa yang diperlukan oleh anggota-anggotanya dari segi bantuan dan perkhidmatan, adalah seperkara yang diakui oleh syarak dan ia dari jenis bantu-membantu dalam kebajikan.
(ii) Begitu juga insurans syarikat mirip kerjasama (kooperatif) bagi maslahat masyarakat umum dan apa yang termasuk di dalamnya dari perkara seperti pengangguran, keuzuran, umur tua, kemalangan waktu bekerja dan yang seumpamanya, pihak konferensi telah memutuskan jenis insurans seperti ini adalah diharuskan. Dari itu ternyata bahawa insurans jenis kooperatif sahajalah yang dibolehkan oleh persidangan ulama antarabangsa itu.
Ini bererti juga bahawa insurans yang dikelolakan oleh syarikat-syarikat swasta yang bertujuan untuk mendapat keuntungan peribadi atau untuk faedah segelintir manusia telah tidak dapat pengakuan daripada para ulama yang menyertai persidangan Islam antarabangsa ini.”
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I shall not go in details, the need of having such fatwa in Singapore. Nevertheless, this fatwa is helpful, to serve as an advice, for many Singaporean Muslims, in need of insurance, but do not know if they can get it.
Hospitalisation bills are enormously expensive? If no insurance, how?
Takaful Investment Plans are good, but I am risk averse. I need insurance, how?
Car insurance in Singapore is mandatory? If no insurance, how?
Answer: If you are living in Singapore, and you need insurances that Takaful Investment Plan does not offer, like hospitalisation insurance, car insurance, business insurance, mortgage protection insurance, property insurance, travel insurance, pet insurance, Do Get It From A Cooperative.
At the end of the day, the choice is yours! Wassalam….. 🙂
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