(concurring specially).
I concur in the result reached in the opinion of Judge HOYT on the grounds that the accumulated fund of $10,890.70 paid to Leah E. Clark under the annuity contract is not “proceeds of life insurance.”
The issue seems to have become beclouded because an insurance company is the financing institution which agreed to furnish the annuity and because the contract provides that upon the employee’s death the company will pay to the named beneficiary an amount equal to the employee’s contributions. The fact that this money was payable upon the employee’s death and is referred to in the contract as a “death benefit” furnishes the basis for the argument that it may be regarded as life insurance. However, it is not the terms used, but the facts which determine its true character. If we make an independent analysis of the fund of money in question, exactly how it came into being and into the hands of Mrs. Clark, it will be seen that it is not *436correctly regarded as insurance, but was an attempt to purchase an annuity for Mr. Clark’s lifetime, which failed of its purpose, and therefore the payments made toward it were refunded.
The projected annuity for Mr. Clark is not the aspect of the contract with which we are particularly concerned. The inquiry here pertinent is as to the phase of the contract which deals with Mrs. Clark’s relationship to it and the process by which she acquired the money in question. Insofar as she was concerned, the company’s only obligation was that if at the time of Mr. Clark’s death, it had not repaid to him the' full amount of his personal contributions toward the annuity, it would pay over to her the amount he had paid in, plus interest thereon.
In analyzing the problem it is helpful to compare it with analogous situations. If, instead of entering into this particular contract to provide an income after his retirement, Mr. Clark had by a plan of systematic savings accumulated this fund of $10,890.70 in bonds, stocks or a savings account, subject to his control and disposition as this account was, and had died, leaving it to his wife, there is no question but that it would be considered part of his estate; likewise, if just prior to his death he had taken such a fund and purchased an annuity, to be amortized back to him at so much per month, with any amount remaining in the fund at his death to go to his wife, it seems equally logical that in such instance it would also have been part of his estate and not life insurance.
There appears to be no significant difference between the situations just described and that in the instant case. It is important to bear in mind that the deceased could have quit and withdrawn his accumulations at any time. It remained his property and under his control just like a savings account, stocks, bonds or any other property. Inasmuch as he owned it, it would have passed to Mrs. Clark even if the contract had said nothing about it. The fact that it recited what would happen as a matter of law anyway should not be considered as transforming it into life insurance.
Correlated to the proposition just stated is the important and controlling fact that the financing institution, Equitable, incurred no risk of loss in the event of Mr. Clark’s death. It was obliged to pay nothing except to refund the payments he had made toward the annuity, plus interest thereon. In .regard to the company’s contributions, it expressly provided that:
“No death benefits will be allowed by the Equitable with respect to the employer’s purchase payment * * * ”
From the facts above discussed it seems quite unmistakable that the contract was one for an annuity and that it does not have the characteristics to properly classify it as a contract for life insurance.
*437An “annuity” is a provision for an income for a period of years or for life, with no indemnity feature; whereas, “insurance” is an agreement that, for a premium it receives, the insurer will pay to a beneficiary a stated sum upon the happening of a contingency such as death, or other loss. It involves risk on the part of the insurer to pay on the happening of the contingency and the spreading of the risk over the group who pay the premiums.1 Or, as is sometimes stated, “Insurance involves risk-shifting and risk-distributing.”2 Recognition of this principle is reflected in our statute: Sec. 31-1-10, U.C.A., 1953:
“ ‘Insurer’ defined. — ‘Insurer’ includes all persons engaged in the assumption of insurance risks.” (Emphasis ours.)
That view is supported by a clearly stated and well-reasoned treatment of the subject in In re Atkins’ Estate 3 in which the New Jersey Supreme Court discusses a similar proposition:
“ * * * The refund annuity contract such as we are here considering is very different. By it the insurance company agrees to repay the annuitant, in instalments during his life, the amount paid in by him to the company, and if at his death there be a balance unpaid to him, to pay that balance to the person designated by the annuitant to receive the same. It is a contract by which the annuitant protects himself, during his life, by making an investment which will assure the receipt by himself, of an adequate or desired annual sum during his lifetime, with the further assurance that if he should die prematurely, his estate or those whom he desires to receive distribution thereof will not suffer the loss of the repayment he has himself not yet received.”
The court placed emphasis on the fact that in the annuity contract the company assumed no risk of loss by reason of the premature death of the annuitant, and that its only risk was in case the annuity matured and the annuitant lived longer than expected. It reasoned in accordance with the views expressed above that because there was no risk-shifting or .risk-distributing in connection with the annuity phase of the contract, but simply a return of the accumulated payments upon the death of the employee, that the fund was not life insurance. The Supreme Court of the United States similarly reasoned to the same conclusion in the case of Helvering v. LaGierse.4
As explained in the opinion of Judge HOYT, the facts in In re Fenner’s Es*438tate,5 are significantly different from those involved here where Mrs. Clark was simply entitled to receive back the payments her husband had made toward the purchase of an annuity. For the foregoing reasons it is my opinion that the Tax Commission was correct in ruling that the money she thus received should be considered part of the decedent’s estate and subject to tax under the inheritance tax statutes, Secs. 59-12-1 to 7, inc., U.C.A.1953.
McDONOUGH, J., concurs in the concurring opinion of CROCKETT, C. J.. See Sec. 31-11-2, U.C.A., 1953; Helvering v. LaGierse, 312 U.S. 531, 61 S. Ct. 646, 649, 85 L.Ed. 996.
. Ibid.
. 129 N.J.Eq. 186, 18 A.2d 45, 49.
. See Footnote 1, Supra.
. 2 Utah 2d 135, 270 P.2d 449.