Mutual Benefit Association(Insurance) Law and Legal Definition
A mutual benefit association is a social organization which provides insurance to its members on an assessment basis.
The following is an example of a state statute (Delaware) defining 'mutual benefit association.'Pursuant to 18 Del. C. § 5502, a mutual benefit association means “a corporation, society, order or association which has no capital stock, which issues certificates of membership providing for payment of benefits in case of sickness, disability or death of its members and which accumulates funds by the collection of fees or dues from its members, at either stated or irregular intervals, with which to discharge its liabilities on its membership certificates and with which to pay the administrative expenses.” A true mutual benefit association is based upon reciprocal contracts and requires that a member receive benefits as a matter of right. Such an organization is distinct from one in which the member receives benefits because his case is deserving, not because previous contributions have given him a contractual right thereto. [Estate of Henderson, 17 Cal. 2d 853 (Cal. 1941)].