Question :

The compensation system employed by the university where I work stipulates that in case of death, an employee`s family shall receive so much as twelve times his basic salary. In return, the university receives a group insurance document that covers death, total disability, and permanent partial disability. Accordingly, what is the Islamic ruling on the following: 1-Employees benefiting from the insurance although they had no say as to subscribing to it or not? 2-Human resources managing insurance contracts and dealing with insurance companies, as part of their job description?

The Answer :

All perfect praise be to Allah, The Lord of The Worlds, and may His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

It is permissible for an employee or his family to take the compensation paid by insurance companies so long as the insurance contract was concluded by the employer, without the employees permission, and the insurance payments aren`t deducted from his salary.

As regards conducting the insurance contracts by members of human resources, if their task is limited to documentation and data entry, then it is permissible. However, if they manage the contracts from A to Z, then their work is forbidden since subscribing to non-Islamic insurance companies is forbidden. In addition, there are lots of Islamic insurance companies to subscribe to. And Allah knows best.