Fraternal Benefit Society
Fraternal benefit societies are not-for-profit membership groups that unite people with common bonds. They are primarily life insurance providers and offer community give-back opportunities.
A fraternal benefits society is an incorporated organization, order or supreme lodge, without capital stock and having a representative form of government, that is conducted solely for social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic or cultural purposes.
It is a not-for-profit organization
Fraternal benefit societies offer members insurance products like life and disability coverage. They also carry out social, charitable, and community service programs. These activities are based on the ethical principle of reciprocity and benevolence. Their operations are governed by law and supervised by state insurance departments.
They are not-for-profit organizations that are recognized as 501(c)8 organizations and are tax exempt under federal and state laws. They do not have shareholders and any profits that exceed necessary expenses for operations, claims payments, and maintaining reserves are returned to their members.
These groups are unique in that they combine the benefits of membership, community give-back, and insurance products into one package. They are ideal for clients who want more out of their insurance coverage than just the basic policies offered by traditional insurers. They can provide a wide range of products to meet the needs of any client. In addition, they offer competitive commissions. This makes them a great choice for agents who are looking to expand their product line.
It offers a variety of insurance products
A fraternal benefit society (also known as a friendly society or mutual aid society) is a not-for-profit membership group that unites people with common bonds. Unlike traditional insurance companies that are built to generate profits for shareholders, these societies put their members first. Profits over and above the cost of operations, claims payments, and maintaining reserves are returned to members or used for member-exclusive benefits.
Fraternal life insurance is one of the most popular policies that these organizations offer, and it provides families with peace of mind knowing that their loved ones will be taken care of in the event of an unforeseen death. In addition, they also offer financial products like mutual savings banks and credit unions, as well as community give-back opportunities.
Despite their long history in North America, many fraternal societies have struggled to stay relevant in today’s competitive environment. They face the same challenges as other insurance companies, including finding distribution and growing their membership. To overcome these challenges, the Alliance has established programs to help society CEOs make their organizations more attractive and competitive.
It offers community give-back opportunities
Fraternal benefit societies offer opportunities for members to volunteer their time to community organizations. This creates a sense of camaraderie and promotes the value of caring for one another. These community-focused societies also provide monetary and goods donations to local groups. These donations help to foster long-term economic stability and lessen the need for public sector funding.
For example, SPJST sponsors a program called People Helping People that allows members to donate to local food pantries. Upon donation, society members receive matching funds from the State Office. Last year, societies in Texas donated more than $361,001 to community and parish projects through this program.
These benefits can encourage clients to partner with a fraternal life insurance company. Many fraternal societies offer competitive products and premiums, as well as financial strength through conservative investing and a large surplus. These companies are not for profit, and profits that exceed what is needed for operations, claims payments, and reserves are returned to members.
It is a unique opportunity
Fraternal benefit societies are unique organizations that combine insurance and volunteerism. They are not-for-profit organizations that offer life insurance, disability coverage and investment products to members. They also offer community programs and charity events that help their members and the broader community. These societies meet four requirements to qualify as a tax-exempt organization: They have a common purpose among their members, operate under a lodge system, insure the lives of its members and their beneficiaries, and hold a democratic form of government.
These unique groups are the ideal insurance partners for agents because they pair coverage with benefits and offer competitive product cash values and non-guaranteed dividends. In addition, they give their partnered agents incentives like product training and marketing programs.
While oaths, secret signs and knowledge are less common today, the principles of discipline, conviviality and benevolence remain in place. This is reflected in the work of BetterLife, which donates millions to local communities and provides its policyholders with exclusive member benefits.