
<PAGE>   1





                                                                    EXHIBIT 10.7

                           BEVERLY ENTERPRISES, INC.
                       EXECUTIVE LIFE INSURANCE PLAN AND
                            SUMMARY PLAN DESCRIPTION

          (As Amended and Restated Effective as of December 31, 1993)

1.       PURPOSE

         The Purpose of the Executive Life Insurance Plan is to secure and
         retain key personnel who will be responsible for the future growth and
         success of the company.

2.       DEFINITION

         Unless the context clearly indicates otherwise, the following terms,
         when used in the Plan, shall have the meanings set forth in this
         section 2.

         a.      "Plan" shall mean the Beverly Enterprises, Inc. Executive Life
                 Insurance Plan as set forth herein and in the insurance
                 policies issued hereunder and by this reference incorporated
                 herein, as the same may be amended from time to time.

         b.      "Company" shall mean Beverly Enterprises, Inc. and its
                 participating subsidiaries.

         c.      "Board of Directors" shall mean the Board of Directors of
                 Beverly Enterprises, Inc.

         d.      "Committee" shall mean the Committee appointed by the Board of
                 Directors to administer the Plan.  The duties of the Committee
                 will be assigned to the Compensation Committee of the Board.
                 The Committee shall be a named fiduciary and Plan
                 Administrator hereunder and, to the extent not delegated to
                 the insurance company, have complete discretion and authority
                 to interpret the Plan and decide all questions of eligibility
                 and benefits.

         e.      "Employee" means those persons who are employees of the
                 Company under the definitional provisions of Section 422 of
                 the Internal Revenue Code of 1986, as amended, and the
                 regulations thereunder.

3.       THE PLAN

         It is the current intent of the Company to provide qualified
         participating individuals with renewable individual term life
         insurance during their employment by the Company, if available at
         preferred, standard, or smoker rates from the carrier then being used
         to provide such policies.  It is also the current intent of the
         Company to continue to pay the premium for such insurance for the
         individual, to the extent he is vested herein, after retirement or
         termination.  Such a continuance of the insurance in its full amount
         after retirement is conditioned on the individual being fully vested
         and over age
<PAGE>   2
         59 at the time of his retirement from the Company.  The Plan is a
         non-qualified employee welfare benefit plan governed by the Employee
         Retirement Income Security Act of 1974, as amended ("ERISA").

4.       BENEFITS

         The amount of insurance benefits shall be set from time to time, and
         may be changed at any time, at the sole discretion of the Company.
         Benefits hereunder are payable solely from the proceeds of insurance
         policies purchased hereunder, and neither the Company, Board of
         Directors, nor Committee shall be liable or responsible for any such
         benefits.  Rather, a participant or his beneficiary may look solely to
         the insurance policy(ies) purchased on behalf of the participant for
         benefits under this Plan.  In the event of any conflict between the
         terms of this document and the actual insurance policy(ies), the
         insurance policy(ies) shall govern.

5.       ADMINISTRATION OF THE PLAN

         The Plan shall be administered by the Compensation Committee which
         shall consist of two or more members of the Board of Directors.  The
         Committee shall have complete authority in its discretion to determine
         the individuals to whom life insurance coverage under the Plan shall
         be granted as well as the amount of each policy, and to increase or
         decrease such amounts from time to time as the Committee in it sole
         discretion deems appropriate.  In making such determinations, the
         Committee may take into account the nature of the services rendered by
         the respective Employees, their present and potential contributions to
         the Company's success, and such other factors as the Committee in its
         discretion shall deem relevant.  For purposes of processing and paying
         all benefit claims hereunder and with respect to the provision of full
         and fair review of claim denials, the insurance company issuing the
         policies under the Plan shall also be a named fiduciary with authority
         and discretion to decide all benefit rights under such policies.

6.       ELIGIBILITY

         All Plan grants shall be subject to the following provisions:

         a.      Only Company Employees appointed by the Board of Directors
                 shall be eligible.

         b.      The Employee must be willing to submit to a physical
                 examination in accordance with requirements of the insurance
                 company issuing the policies.

         c.      The Employee must be insurable at normal rates (as determined
                 by the Company in its sole discretion) according to the Health
                 Requirements of the insurance company.



                                      2


<PAGE>   3
7.       VESTING

         a.      Except as provided below, an Employee shall begin to vest in
                 his benefits hereunder only after he has both attained age 50
                 and completed at least 10 years of service with the Company.
                 Thereafter, the Employee shall vest at the rate of 10% per
                 year of service, such that he will be 100% vested only after
                 both completing at least 20 years of service and attaining age
                 59.  For example, an Employee covered by a $100,000 policy who
                 leaves the Company at age 55, after having worked for the
                 Company since age 35, would be 60% vested and have a retiree
                 policy of $60,000.  Employees vest only for whole years of
                 service with the Company completed at the time of their
                 retirement or termination.  No partial years shall be counted.

         b.      Notwithstanding the above, Employees shall retain their vested
                 percentage earned as of December 31, 1993 under the terms of
                 the Plan in effect immediately prior to this amendment and
                 restatement.  Employees who have attained age 50 but not
                 completed at least 10 years of service as of December 31, 1993
                 shall have their vested percentage hereunder frozen as of
                 December 31, 1993 until they are entitled to further vesting
                 under the terms of paragraph (a) above.  In addition,
                 Employees who have both attained age 50 and completed at least
                 10 years of service as of December 31, 1993, but who are
                 vested in a larger percentage under the prior terms of the
                 Plan than they would be under these amended and restated
                 terms, shall also have their vested percentage frozen as of
                 December 31, 1993 until they would be entitled to a larger
                 vested benefit under the provisions of paragraph (a) above.

         c.      Notwithstanding anything to the contrary herein, the
                 provisions of paragraph (a) and (b) of this Section 7 (other
                 than the last two sentences of paragraph (a)) shall not apply
                 to those Employees who as of December 31, 1993 hold the title
                 of Executive Vice President or above.  Instead, such Employees
                 will continue to vest at the rate of 10% per year of service
                 starting at age 50 and will be 100% vested at age 59.  For
                 example, an Executive Vice President covered by a $300,000
                 policy who leaves the Company at age 54, after having worked
                 for the Company since age 49, would be 50% vested and have a
                 retiree policy of $150,000.  An Executive Vice President who
                 joined the Company after age 50 and who later became a
                 participant herein will be vested at 10% per year of his
                 employment, not limited to being vested at 10% per year of his
                 participation in the Plan.  For example, a person joins the
                 Company in 1984 at age 50 and is granted participation in the
                 Plan in 1992.  The Employee (assuming he qualifies as an
                 Executive Vice President on or before December 31, 1993) is
                 90% vested upon being granted participation in the Plan and
                 will be fully vested in 1993 on reaching age 59.





                                       3
<PAGE>   4
8.       GENERAL PROVISIONS

         a.      Nothing in the Plan or in any instrument executed pursuant
                 thereto shall confer upon any Employee any right to continue
                 in the employ of the Company or shall affect the right of the
                 Company to terminate the employment of an Employee with or
                 without cause.

         b.      The Board of Directors or Committee may terminate, suspend or
                 amend the Plan at any time and in any manner.

         c.      The Plan became effective in November 1979, and was amended
                 and restated effective as of December 31, 1993.

         d.      The Company may withhold from the participant's wages or
                 salary the appropriate amount of taxes for the value of
                 coverage provided or premiums paid each year hereunder.

9.       BENEFICIARY DESIGNATION

         Except as otherwise required by community property laws, divorce
         decrees or property settlement agreements, participants may name
         anyone they wish (including concurrently and/or consecutively) as
         beneficiaries of their insurance benefits hereunder by filing a
         written designation with the appropriate insurance company on a form
         prescribed or approved by such insurance company.  Such designations
         may be changed at any time by executing and filing a new beneficiary
         designation form hereunder.

10.      ASSIGNMENT AND ALIENATION

         To the fullest extent permitted by law, benefits under the Plan cannot
         be involuntarily assigned, alienated, sold,  pledged, encumbered, or
         anticipated.  Similarly, Plan benefits are not subject to claims of
         creditors, attachment, garnishment, or other legal or equitable
         process.

11.      INSURANCE PROVISIONS

         This Plan generally offers term life insurance benefits only, and does
         not promise or guarantee any permanent insurance or cash value.  The
         Plan itself is not an insurance policy, although one or more insurance
         policies will be purchased to fund benefits hereunder.  Except to the
         extent required by such insurance policies, this Plan shall not be
         subject to any state insurance laws or regulations.

12.      PARTICIPANT RIGHTS

         As a participant in the Plan, you have certain rights under the
         Employee Retirement Income Security Act of 1974 (ERISA).

         This document constitutes both the Plan instrument (together with the
         actual insurance policies) and the "Summary Plan Description" which
         explains the provisions of the Plan.





                                       4
<PAGE>   5
         You may examine, without charge, at the Plan Administrator's Office
         and other locations, all relevant Plan documents, insurance contracts,
         and items which have been filed with the Department of Labor.

         You may request copies of the above items by writing to the Plan
         Administrator.  A reasonable charge can be made for such copies.

         You have the right to receive a written explanation of why any claim
         for a benefit is denied in whole or in part and to have such claim
         reviewed.

         "Fiduciaries", the people responsible for the Plan's operation, must
         act prudently and solely in your best interest as a Plan participant.

         No one, including your employer, may take action or otherwise
         discriminate against you solely for the purpose of preventing you from
         obtaining a benefit or from exercising your rights under ERISA.

         A Plan participant may file suit in a Federal court for cause, such as
         failure of the Plan Administrator to provide any of the information
         described above, or breach of fiduciary responsibility by the Plan
         Administrator.  Any person being sued has the right to countersue for
         cause.  The court may required the unsuccessful party in any such
         suits to pay all legal costs.

         If you have any questions regarding your rights, you should contact
         your Plan Administrator.  You may also contact an area office of the
         U.S. Labor Management Services Administration, Department of Labor.

13.      FILING A CLAIM

         Upon your death, if your named beneficiary is otherwise eligible, he
         or she may request to begin receiving benefits under the Plan by
         completing the appropriate claims form and returning them to the
         applicable insurance company.

14.      CLAIM REVIEW PROCEDURE

         If an application for Plan benefits is denied in whole or in part, the
         claimant will be notified in writing 90 days after receipt of his or
         her claim.  In some instances, the Company or insurance company may
         require an additional 90 days to process the claim.  When additional
         time is needed, the claimant will be notified of the special
         circumstances requiring the extension.  The extension may not exceed a
         total of 180 days from the date the claim was originally filed.

         If additional information is necessary to process the claim, the
         claimant will be notified of the items needed in order to resubmit the
         claim.





                                       5
<PAGE>   6
         Any notice of denial of the claim for benefits will include the
         specific reasons for denial and references to the relevant Plan
         provisions and/or insurance policy provisions on which the denial was
         based.

         Within 60 days after receiving a denial, the claimant or his or her
         authorized representative may appeal the decision by (1) requesting a
         review by writing the insurance company, (2) reviewing pertinent Plan
         documents and (3) submitting issues and comments in writing.

         A decision on appeal will normally be given within 60 days of the
         receipt of the appeals request.  If special circumstances warrant an
         extension, then the decision will be made no later than 120 days after
         receipt of the appeal.





                                       6
<PAGE>   7
                                 PLAN DIRECTORY

Listed below is other pertinent information concerning the Plan:
Sponsor for ERISA purposes:  Beverly Enterprises, Inc. - 1200 South Waldron
Road, Suite 155, Ft. Smith, Arkansas 72903 - TEL. (800) 666-9996.

Plan Administrator:  The Beverly Enterprises, Inc. Executive Life Insurance
Plan Administration Committee, c/o Human Resources Dept., Beverly Enterprises,
Inc., 1200 South Waldron Road, Suite 155, Ft. Smith, Arkansas 72903; TEL. (800)
666-9996.  The Plan Administrator is the named fiduciary of the Plan under
ERISA for all purposes except claims processing, payment, denial and appeal, in
which case the named fiduciary is the insurance company issuing the policy in
question.

The Plan Administrator may designate individuals or committees to serve as its
agent in discharging all or any part of its function as Plan Administrator.
Further, the Plan Administrator may appoint another person or entity to serve
as third party administrator to process claims or to discharge such other
functions as the Plan Administrator may determine.

Agent for Service of Legal Process:  Senior Director, Benefits, Compensation,
and Corporate Personnel, Beverly Enterprises, Inc., - 1200 South Waldron,
Suite 155, Ft. Smith, Arkansas 72903 - TEL. (800) 666-9996.

Sponsor Identification Number:       95-3744256

Plan Fiscal Year:                    January 1 to December 31

Plan Number:                         507

Participating employers:             A complete list of participating employers
                                     is available upon written request to the
                                     Plan Administrator and is available for
                                     examination.

DA932220.116





                                       7
