What is a common characteristic of fraternal benefit societies?

Fraternal benefit societies are nonprofit organizations that typically provide insurance and other financial services to their members, who often share a common bond, such as membership in a specific religious group, ethnicity, or social organization. This characteristic of being nonprofit is significant; these societies often aim to provide mutual aid to their members rather than generating profit.

By focusing on serving specific groups, fraternal benefit societies create a sense of community and solidarity among their members. They may offer life insurance, health insurance, and other financial products that support both the individual member and the group as a whole. The model promotes a shared responsibility for one another in times of need, reflecting the nonprofit nature of these organizations, as opposed to a profit-driven approach.

This understanding differentiates fraternal benefit societies from for-profit companies that exist primarily to generate profit and serve a broader market, or from organizations that might offer insurance options to non-members. The collective focus on mutual benefits and community ties underlines the essential purpose of fraternal benefit societies, reinforcing their role in the insurance landscape.