A life insurance arrangement that seeks to evade insurable interest statutes is commonly known as "stranger-originated life insurance" (STOLI). In STOLI transactions, an individual, often a third party or investor, initiates the purchase of a life insurance policy on the life of another person without having a legitimate insurable interest. The motivation behind STOLI schemes is often financial speculation, where investors aim to profit from the death benefits paid out upon the demise of the insured individual. Insurable interest is a fundamental principle in insurance, ensuring that policies are issued to individuals who have a genuine financial stake in the well-being of the insured person.

To address the ethical and legal concerns surrounding STOLI arrangements, many jurisdictions have implemented regulations to restrict or prohibit these practices, safeguarding the integrity of life insurance and emphasizing its intended purpose as a means of financial protection for those with a legitimate insurable interest in the insured individual's life.

An insurance firm that is owned by its policyholders as opposed to shareholders is known as a mutual insurance company. Policyholders are regarded as members and have certain ownership rights in a mutual insurance firm. These rights can include the capacity to choose the board of directors for the business and cast ballots on other significant choices. An organization that operates for the benefit of its members as a whole has as its main goal providing insurance coverage to its members.

Mutual insurance firms are unique in that their profits are usually distributed back to policyholders in the form of dividends, lowered premiums, or other advantages. In contrast, stock insurance businesses pay their stockholders a portion of their profits.

As a result of the members' shared interests, mutual insurance companies are frequently distinguished by their emphasis on long-term stability and policyholder servicing. Since policyholders have a greater say in the governance and decision-making of the organization, the emphasis on policyholder ownership can foster a sense of loyalty and trust.

Mutual insurance firms still exist in a number of industries, such as life, property, and casualty, and healthcare insurance, while being less prevalent than stock insurance companies. A mutual insurance company's organizational design demonstrates a dedication to putting policyholders' demands and interests ahead of external shareholders' profit maximization.