Insurance is a fundamental aspect of almost every estate plan. If one is young and has a large family, adequate insurance to protect his family is essential. In this issue, we will discuss a topic of profound importance to the financial welfare of the Orthodox community. We will review and expand upon a proposal made by Rav J. David Bleich concerning the purchase of insurance as a community. We will begin by discussing the permissibility of acquiring insurance and the possibility that insurance may be required.
The Permissibility of Purchasing Insurance - Rav Moshe Feinstein and Rav Ovadiah Yosef
Both Rav Moshe Feinstein and Rav Ovadia Yosef were asked whether Halacha permits acquiring insurance, or perhaps views acquiring insurance as a lack of faith or trust in Hashem. Both of these authorities wholeheartedly permitted one to acquire insurance. He stated that insurance is a legitimate business venture and does not demonstrate a lack of faith in Hashem. Rav Moshe points out that Hashem endowed humanity in recent generations with the idea of establishing insurance. Moreover, Hashem provides the individual with the intelligent idea to purchase insurance. As long as we grasp that Hashem deserves the credit for giving us these ideas, Hashem credits us with having complete faith in Him. This idea is expressed in Targum Onkelos to Devarim 8:18. The Torah says, "And you shall remember Hashem, your God, because He is the One Who gave you strength to make wealth." Onkelos translates this Pasuk as commanding us to recall that Hashem presented us with the idea to acquire property. He notes that we should have faith that Hashem will provide us with the means to pay the insurance premiums each payment period. Rav Moshe noted that this permission undoubtedly extends to life, fire, theft, and car insurance.
Interestingly, Islamic Law, L'havdil, forbids the institution of life insurance. Indeed, life insurance is illegal in Libya and Iran. Furthermore, an editorial appeared in the New York Times February 23, 1853 condemning the use of life insurance as leading to laziness. Many Christian theologians in the sixteenth and seventeenth centuries condemned life insurance for similar reasons. Rav J. David Bleich (Tradition 31:3, page 61) notes that these non-Jewish objections to life insurance are not reflected in the rabbinical literature.
Requirements to Purchase Insurance
Not only do rabbinical authorities permit acquiring insurance; there exist considerable Halachic rulings that require insurance in certain circumstances. For example, Teshuvot Beit Shlomo (Choshen Mishpat 48) rules that since it is customary to acquire insurance, one partner who pays the premium for fire insurance may recover half the cost from the second partner. He cites as precedent the Mishna (Bava Batra 7b), which states that all residents of a town are required to contribute to the construction of a protective wall around the town. He reasons that insurance costs are of the same category as expenditures for protecting a city. Rav Bleich notes that "Beit Shlomo's analogy of insurance to erection of fortifications for the defense of a city certainly indicates that seeking protection against financial loss is ideologically no different from seeking protection against marauders." Rav Bleich cites a number of other rabbinical rulings that required individuals to acquire insurance.
Rav Bleich (in the aforementioned article, pages 62-66) writes that the Jewish community should purchase medical and life insurance as a group. He cites as precedent the aforementioned Mishna in Bava Batra that requires all residents of a town to contribute to the erection of a protective wall. Rav Bleich notes that the Shulchan Aruch (Choshen Mishpat 163:1) rules that even a minority of the residents may insist that a levy be imposed upon all townspeople in order to raise funds for such purposes. The Rama notes that this rule applies to any communal need. In addition, the Rama rules that townspeople may compel one another to contribute to a fund to provide for the needs of strangers in their midst and to provide charity for the poor.
Rav Bleich states the well-known fact that people who lack adequate medical insurance often are denied access to first class medical care. He cites studies that demonstrate that people without proper insurance have a much higher mortality rate than those who have medical insurance. He therefore concludes, "The community clearly has an obligation to provide for the medical needs of the indigent. This establishment of a fund to defray medical expenses represents both a needed social amenity as well as a charitable obligation, and the community is fully empowered to levy a tax for either purpose."
Rav Bleich continues and writes,
A quite similar argument might be made for a communal policy requiring mandatory life insurance coverage. Sadly, there have been cases in which a young breadwinner has died at an early age leaving a widow and minor children destitute. The support of the widow and orphans then becomes a communal burden. The community certainly has a charitable obligation with regard to their support. It also has the authority to impose a tax in order to establish a charitable fund in anticipation of such needs. It would appear that the community would also have the right to use those funds to defray the cost of a group life insurance policy for each of its members, if for no other reason than on the grounds that such an arrangement is cheaper, more efficient, and more dignified than simple charity.
It also seems that communities in which most of the members are homeowners should establish communal mortgage insurance policies. This can avoid foreclosures in the wake of tragic deaths of young breadwinners.
Another consideration in favor of establishing such policies is the extraordinary high cost of Orthodox living outside of Israel. This can be somewhat mitigated by lowering insurance costs for the Orthodox community.
Rav Bleich writes that even if the community fails to organize as a group to establish such insurance policies, smaller communal groups should establish such policies. Synagogues and Jewish organizations should do their best to implement these excellent ideas.
Next week, God willing and Bli Neder, we will conclude our series on estate planning with several suggestions for maintaining religious goals and values through wills, maintaining Shalom Bayit, and Mesora.