Life & Health Insurance Practice Exam 2026 - Free Practice Questions and Study Guide

A fraternal benefit society is essentially a type of fraternal organization that provides insurance benefits to its members. These societies operate on the principle of mutual aid among members who share a common bond, which could be based on religion, ethnicity, or other affiliations. Unlike stock and mutual insurance companies, which are primarily concerned with profit and maximizing shareholder value, fraternal benefit societies are focused on providing benefits to their members, which reinforces their identity as a fraternal organization.

While these societies may also possess some characteristics resembling non-profit organizations, the defining trait of a fraternal benefit society lies in its foundation as an organization of individuals coming together for collective benefit and welfare. This aspect distinguishes them from other types of insurers, as their primary goal is to serve the needs of their members and foster a sense of community, rather than generate profits.