Insurance in Singapore for Muslims – A Reflective Story on Real Risks and Real Planning

The story we keep hearing

Ahmad is forty two and worked in logistics. When the pandemic shut down his sector, he was out of work for nearly a year. The family ate into their savings. School fees kept coming, the mortgage still had to be paid, and stress seeped into every corner of their home.

Work eventually returned. Then two years later, Ahmad died suddenly from a heart condition. His wife Nur found herself piecing together what he left behind — CPF balances, a half-paid flat, some savings plans, and a mountain of confusion. Advice came from friends, uncles, even ustaz, but each opinion pulled her in a different direction. Some said insurance was haram. Others said it was fine if used responsibly. No one showed her how Singapore’s system actually works for Muslims.

Ahmad had meant well. He just never set the papers in order.

The tension we must name

Many religious voices warn against insurance because of riba and uncertainty. That concern is real. But the Islamic Religious Council of Singapore (MUIS) has clarified in its fatwas that:

• Insurance nominations can be made revocable. This means Muslims may direct benefits to their loved ones, while still ensuring faraid (Islamic inheritance) can apply later.
• CPF nominations are valid. MUIS has explained how Muslims can use this nomination responsibly so families are not left stranded.

At the same time, Qur’an in Surah an Nisa reminds us that heirs have clear rights, and the Prophet ﷺ said it is better to leave one’s family provided for than to leave them begging. That balance — between spiritual caution and practical protection — is exactly where Muslim families in Singapore must stand.

Why paperwork matters more than talk

What actually breaks families is not usually riba. It is the missing nomination form. The expired insurance plan. The widow who cannot access funds quickly because her husband never documented his wishes.

• Without nominations, payouts may be delayed for months while legal processes unfold.
• Without protection plans, a single diagnosis or sudden death can push a family to sell their flat or drain children’s education savings.
• Without guidance, well-meaning clerics may give religious advice that does not match Singapore’s financial framework, leaving widows and children vulnerable.

This is not theory. Many Singaporean Muslims have walked this road.

The couple who thought CPF was enough

Zul and Hana were in their early thirties. They had just collected the keys to their BTO flat, a baby on the way, and a calendar full of bills — childcare deposit, renovation loan, car instalments. They assumed CPF savings and MediShield were enough to keep them safe.

Then came the diagnosis: stage two lymphoma. Zul, the main earner, had to stop working for treatment. His income disappeared overnight. CPF MediSave covered part of the hospital bills, but the daily costs — milk powder, loan repayments, transport — kept rolling in. Within months, their emergency savings were gone. Hana borrowed from relatives to keep the flat.

Their story is not rare. A 2022 CNA report found that Singaporeans face a critical illness protection gap of 74%, amounting to S$579 billion. Among young adults, more than two in three have no critical illness cover at all. That gap is where families like Zul and Hana fall — fast.
(Channel NewsAsia)

Two categories to get right

1. Protection during life
   – Income protection for job loss or disability.
   – Critical illness coverage that pays when health fails.
   – Retirement savings plans that top up CPF Life so old age is not left to chance.
2. Protection after death
   – Life insurance or endowment policies with clear, revocable nominations.
   – CPF nomination forms that are MUIS-approved.
   – A file at home that a spouse can actually understand, not just a stack of unopened letters.

A young couple at the start of life together

Farid and Aisyah married at twenty eight. Their first child arrived quickly. Between a car loan, a housing loan, and childcare costs, their salaries felt thinner every month. Insurance was not on their radar — they thought it was for “old people.”

When they sat down with Mr Ishtiaq, he painted a picture they had not considered.

• What if Farid lost his job tomorrow? With no income protection, the flat instalments would swallow their savings in three months.
• What if Aisyah fell seriously ill? The cost of treatment and a helper would exceed what Medisave could cover.
• What if Farid passed away early? Without a clear nomination, the life insurance payout might stall, and CPF balances could take months before the family saw a cent.

He then showed them a starter plan:

• A modest income protection policy sized to cover six months of expenses.
• Critical illness coverage to ensure family life continues even if one parent cannot work.
• A revocable nomination so that proceeds go straight to Aisyah for the children’s care, while still aligned with MUIS fatwa.
• A small endowment plan to build a fund for their child’s university years.

Farid left that session saying, “I thought insurance was about dying. Turns out it’s about living without fear.”

Where experience makes the difference

This is the point in the journey when families need a guide who respects Islamic values and also understands Singapore’s rules. Not just broad advice, but case-by-case wisdom.

I have personally met Mr Mohd Ishtiaq of Great Eastern, and he is one of our readers. With more than thirty years in the industry, his knowledge of how to shield families is astonishing and practical. In our conversation he explained cases he has handled, including a widow nearly forced to sell her home because of bad guidance. He showed how, with the right planning, Singapore’s system actually protects surviving spouses far more than many people realise — if the correct nominations and claims are made.

Plan properly now. Use the fatwas MUIS has issued. Understand what nominations do. Make sure your spouse and children are not left guessing. And when you need guidance, Mr Ishtiaq is one trustworthy agent you can turn to.

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Mr Mohd Ishtiaq

Senior Financial Consultant with Great Eastern, bringing more than 30 years of experience in helping Singaporean families plan for protection, retirement, and legacy. Widely trusted for his clear explanations of CPF nominations, revocable nominations, and claims processes, aligned with MUIS guidance for Muslim families.

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Editor’s note: Having met Mr Ishtiaq personally, I can vouch for his sincere and practical approach. He is one of our readers and understands the financial concerns faced by Muslim families in Singapore today.

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Senior Financial Consultant with over 30 years of experience helping Singaporean families with insurance, protection, and retirement planning.

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