In a diverse economic landscape, alternative options have become one of the most attractive ways for companies to gain new customers. The life insurance world is no different. One often overlooked alternative is to obtain coverage through a fraternal benefit society insurance company.
There are three typical organizations for life insurance companies:
- Mutual companies
- Stock companies
- Fraternal societies
Mutual companies are owned by their policyholders. Stock companies are owned by their stockholders. Fraternal organizations are non-profit organizations set up to benefit families and individuals through mutual aid. These companies can be based around a religion, profession or ethnic group.
This concept found its beginning in the late 1800s when many immigrant groups found they had limited options for benefits and services they needed. The early societies provided opportunities for families to meet for charitable and social occasions while offering benefits for disability, prolonged illness or death.
Fraternal benefit society insurance companies today frequently offer life and annuity products with options and advantages not offered by traditional life insurance companies. Since these organizations are created around a specific group, all members of the group find products that are best suited to and of the most value to them as individuals. Some groups offer special orphan income benefits or reduced cost availability of products or services.