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Beneficial associations denote those organizations that are formed not for profit, but for the mutual protection, relief, or benefit of their members, relations, dependents, or designated beneficiaries. Beneficial associations are formed and organized, not with a view to accumulate wealth and the making of profit, but, solely for the purpose of rendering financial aid or other assistance to their members, or beneficiaries when visited by sickness, death or other misfortune specifically agreed upon.
Beneficial associations differ from ordinary mutual life insurance companies.
The three distinguishing characteristics of these associations are:
1. They are formed primarily for social or benevolent purposes, insurance being only incidental and not for gain or profit;
2. Their form of government is representative, ordinarily a lodge system; and
3. Their benefits are usually confined to a limited class of individuals.