(a) A corporation, association, or society, or by whatever name called, that issues a certificate, policy, membership agreement, or makes a promise or agreement with its members, whereby, upon the death of a member, money or other benefit, charity, aid, or relief is to be paid, provided, or rendered by the corporation, association, or society to the legal representatives of the member, or to the beneficiary designated by the member, which money, benefit, charity, aid, or relief is derived from voluntary donations, or from admission fees, dues, or assessments, or any of them collected or to be collected from the members, or members of a class therein, or interest or accretions, or accumulations; and if the money or other benefit, charity, aid, or relief, so realized, is applied to or accumulated for the uses and purposes herein specified, the uses of the corporation, association, or society, or the expenses of management and prosecution of its business, is considered to be a benevolent association for the purposes of this chapter.

(b) The definition of benevolent association in (a) of this section does not apply to

(1) burial or death benefits, annuities, endowments, or any other benefit payments of a legal reserve life or health insurer, or of a labor union, railroad brotherhood, or lodge having as a primary business the improvement of working conditions;

(2) a ladies auxiliary to a labor union, railroad brotherhood, or lodge referred to in (1) of this subsection; or

(3) the benevolent plans within fraternal orders if limited to members and if the plan is not the principal object for the formation or continuance of the fraternal order.