Assalamu alaikum,
I have life and long-term disability insurance provided for free as part of my employer benefits. Recently, I was asked/encouraged to opt-in to higher coverage limits based on my income level. To opt-in, I will have to fill out some forms/etc but there is no cost to me, it will just provide more coverage in-case of death/disabiity. Is it okay to opt-in?
Assalamu alaikum
@Mufti_Faraz_Adam @Mufti_Billal do you have any thoughts on this? I need to respond back to my employer
JazakAllah
Wa alaykum salaam,
If there is no payment from your side, then it does not seem that you will be entering into a problematic transaction, as it is not a bilateral transaction, rather a unilateral and non-commutative transaction. Therefore, it seems acceptable based on what you’ve mentioned.
Allah knows best
JazakAllah khair @Mufti_Faraz_Adam, there is no payment from my side, however, usually with these things they are considered a taxable benefit. For example, even right now without increased coverage some of my premiums are considered added to the income, basically it means if my income is 1000 and premiums are 20, I get taxed on 1020 instead of 1000 as the 20 paid by the employer is considered an employment benefit which is taxable. Here, there is a possibility the premiums (and hence tax paid) would increase, however, I don’t pay the insurance company anything.
Then this is excusable because it seems that the tax system is treating it akin to income, but from a Shariah perspective, we are seeing it as a service being provided from your employer to you, where the employer bears the costs and enters into transaction.
Allah knows best