A little History About Fraternal Life Insurance Companies & Their Benefits
A fraternal insurance company is usually over any one of fraternal life insurance companies that offer insurance for any person who has joined a fraternal group to receive insurance from that particular group. You can receive a number of benefits from this fraternal insurance company, outside of the insurance policy you signed up for. Fraternal benefit societies govern fraternal insurance companies and they operate under a “lodge system”. This lodge system means that a member of the lodge is a member of a local group of that society. This society is also self-governing. Local and national boards are elected by members that make up the representative governments in these fraternal benefit societies. Members typically share a common background or bond such as shared ethnicity, religious or vocational views. Many insurance companies, including mutual savings banks and credit unions, can trace their origins to fraternal benefit societies that now govern today’s fraternal insurance companies.
In 1868, when the insurance industry in America was still young and was a luxury reserved for the rich, the fraternal insurance movement began when a group of railroad mechanics from Pennsylvania formed a fraternal organization to provide life insurance for its members, among other functions. By 1920, the idea had caught on and the National Fraternal Congress, an association of fraternal societies, had grown to about 200 member societies with 120,000 local affiliated lodges. With over $9,500,000,000 of life insurance in force, these 200 societies insured approximately nine million members.
The most basic and prevalent benefit of purchasing insurance through a fraternal insurance company is receiving a discount on insurance. This is just one of the benefits a fraternal insurance company can provide, however. These discounts grown with increased volume because of the ability to offer them to groups. Even if you have health issues, the probability is high that you would be approved for coverage, as this is another benefit you can receive by gaining insurance through a fraternal insurance company, depending on what fraternal order you join.
Fraternal life insurance companies under fraternal insurance companies also offer access to other programs, such as college scholarships to the children of members of the organization. This is an important, noteworthy benefit during this time of rising college costs. You may find this beneficial if you find that you have not set aside enough money for your child’s college fund. Other benefits offered outside of the range of typical benefits include an orphan’s benefit, which provides a regular income for a member’s child if both parents pass away. Other discount benefits, saving members money over time, are also provided if members purchase certain products.
A good example of a fraternal insurance company is Foresters Financial. Foresters Financial helps everyday families achieve their long-term financial goals as an international financial services provider. As a fraternal insurance company, they have a global network of over one million members.
To become a member of this fraternal insurance company, you can apply as part of the purchase of a life insurance product underwritten by The Independent Order of Foresters. Members of Foresters enjoy academic scholarships, financial counseling, discounted legal services, access to emergency grants (like short-term financial aid), orphan scholarships/benefits, and terminal illness loans among others. As a contributor to community initiatives, Foresters has provided over $11 million towards playground builds, beach cleanups, and other member events giving families time to relax and reconnect.
As you can see a fraternal benefit society not only provides insurance benefits through the fraternal insurance company, but provides a system where policyholders and their families can meet for social and charitable events. According to the National Fraternal Congress of America (NFCA), an organization that represents 73 fraternal benefit societies in the U.S. and Canada, fraternals raised nearly $17 million in the wake of the September 11th attacks and more than $17 million in donations and materials for victims of hurricanes Katrina, Rita, and Wilma.
But despite their additional offerings and not-for-profit status, fraternal benefit societies must maintain professionalism and are bound by traditional insurance regulations. They must be licensed with the insurance departments of the states in which they operate and must comply with state and federal governing insurance transactions – maintaining quality offerings and service through the fraternal insurance company.
When you compare a fraternal insurance company to a commercial insurance company, you will find that the products being offered are identical, however, the difference is that the fraternal insurance company supplies benefits to policyholders that commercial companies may not supply. Those benefits may include prescription drug discounts, scholarships, and even remembrance services for the deceased.
The fraternal insurance company may also differ in size relative to major insurance companies. While some fraternal benefit organizations may be larger, some limit their business to a specific region and only issue policies in a few states. Those size differences can be an advantage for agents to provide more of a personal touch for their customers.
Fraternal means brotherly and fraternal life insurance companies work to meet the ever-changing needs of their membership, providing benefits and security while promoting community involvement and volunteerism. The fraternal insurance company is guided by the principles they were founded on and open their membership to those from all walks of life that share their guiding principles. When looking at each of these the fraternal insurance company and assorted fraternal life insurance companies, the principles and goals remain the same: to help their members and their communities live better. We can all agree that those are great principles to live by!