Legal Definitions - mutual-benefit insurance

Definition: Mutual-benefit insurance refers to benefits provided by a mutual-benefit association when a loss occurs.

Example: Let's say you are a member of a mutual-benefit association that provides insurance for your car. If you get into an accident and your car is damaged, the association will provide you with the necessary funds to repair or replace your car.

Explanation: Mutual-benefit insurance is a type of insurance that is provided by a mutual-benefit association. This type of insurance is different from other types of insurance because the members of the association are also the owners. When a loss occurs, the association uses the funds collected from its members to provide benefits to the affected member. In the example given, the mutual-benefit association provides insurance for the car of its members. If a member gets into an accident and their car is damaged, the association will provide them with the necessary funds to repair or replace their car.