Insurance in Halakha (3)
IV. Life Insurance
Due to the special characteristics of life insurance which present some unique problems, we are discussing it in a separate section, even though the issues raised are similar to those discussed in connection with insurance in general.
We noted that the "attribute" view of insurance tends to view insurance payments as ipso facto accruing to the party which suffers a loss, that is, the owner of the object even if a third party such as the seller or tenant took out the insurance. By contrast, the "side-bet" view allows the payments to accrue to anyone who pays the premiums.
Life insurance is taken out by the insured to protect his family from the loss in income which results from his passing. It is in fact an example of "beneficiary different from owner" discussed above. The "attribute" view would automatically view life insurance payments as belonging to the "owner" - the one who suffers the loss, namely the family. By contrast, the "side-bet" view would allow more leeway in viewing the payments as fundamentally belonging to the one who took out the policy - the deceased.
A pertinent question was discussed by the Pitchei Choshen, who asks if life insurance benefits belong to the estate - where they can be attached by creditors - or to the beneficiaries directly. He tends to the view that they belong to the estate; this seems correlated with the "side bet" approach.
R. Herzog  concludes that life insurance benefits are not part of the estate. They pass to the beneficiaries and not to the heirs. This position is the only one consistent with the "attribute" approach - the money could only reach the heirs if it were considered part of the overall estate - although the "side bet" approach could also reach this conclusion if the deceased indicated that the benefits should be paid to specific individuals. A careful reading of the responsum indicates that R. Herzog in fact assumes that life insurance "belongs" to the dependents of the deceased - those who suffer from the loss of the insured's income. This correlates with the "attribute" approach.
There is an important difference in halakha between assets and obligations. Assets are considered in the owner's actual possession - muchzak - whereas obligations are only potential value - rauyi. The first-born inherits a double share of muchzak but shares rauyi claims equally with the other brothers. What about an insurance policy?
R. Yehoshua Henkin points out that a life insurance policy is even less than an obligation, because even the obligation itself is not created until after death. Therefore, there can be no question of the first-born receiving a double share. In fact, there is a significant question if life-insurance benefits are part of the estate at all, as we discussed above.
Complicating this simple analysis, however, is the fact that there are two kinds of life insurance policies. One pays a pre-determined amount on death; the analysis above correctly deals with this case. However, some life insurance policies accumulate an asset value, which may be payable during the insured's lifetime or perhaps only after he dies, but the amount is directly related to the amount of his "investment" in premiums and the returns they brought. In effect, the insured has an "account" by the insurance company. In this case there is a very strong case to consider the assets part of the estate.
However, even in this case it is doubtful if the assets are considered muchzak. As mentioned in my previous article, the tendency among posekim is to view even bank deposits as only rauyi.
One more consideration is relevant here. Not only are there two kinds of life insurance, but there are two ways of providing "investment" life insurance. One is through a regular life-insurance company; this case is definitely subject to the above discussion. However, there is also the case of a mutual life insurance association, in which technically the insured acquires shares in the association's assets. It is questionable if this technical structure is to be taken seriously; these companies do not do business any differently than a regular corporation. At any rate, if we take seriously the technical status of these companies as "mutual associations" and not as for-profit companies, and if we view the actual assets of the association as mutually owned (and not merely as owed to the shareholders) then we could indeed view such benefits as muchzak.
Our Roshei Yeshiva have often emphasized that it is appropriate for a ben Torah to choose a profession which will exercise and develop his personal qualities - his midot. It may be that the world needs business people no less than it needs physicians, and certainly many great Torah scholars were businessmen, but a person choosing a career should take into account that a profession based on maximizing profits may have a different influence on his personality that one based on giving personal aid to people in need.
From this point of view, it seems that selling insurance is a most worthy profession for a ben Torah. The initial selling of insurance is a means of reminding one's fellow to prepare for contingencies - in itself a worthy deed. Then there is the business of processing claims. Everyone knows the expression "a friend in need is a friend indeed," and an insurance agent is truly a "friend in need." People turn to him precisely at the times when they have suffered a setback, and in general he is able to be the immediate source of aid to them at a difficult time. There can be no doubt that this can have a positive influence in building a caring and helping personality.
 Kol Torah year 9, issue 9-10, page 2.
 HaPardes, year 29, issue 10, Tammuz 5715, siman 61.
 It should be obvious that such a policy, if it provides for a fixed return, has an interest aspect and if provided through a Jewish company, it should only be taken on the basis of a heter iska.
 In fact, part of the motivation for investing through a life insurance policy instead of through regular investments is exactly for the reason that for many purposes it is NOT considered part of the estate. However, to the extent that dina de-malkhuta does not dictate the judgment, it seems that these assets are part of the estate.
 See Asher Meir, "Money and Means of Payment in Halakha," Alei Etzion 4 (Kislev 5756), p. 127.
 The same question arises with respect to mutual savings and loans societies. Technically, the depositor is really a shareholder, whose halakhic accountability for the use of the money is much greater. But there is no substantive expression of the account holder's supposed ownership status.