Glossary

Fraternal benefit society

A nonprofit membership organization, often built around a faith, heritage or civic mission, that sells life insurance and annuities to its members.

Also called: fraternal, fraternal insurer, fraternal benefit organization

A fraternal benefit society is a nonprofit organization that provides life insurance, annuities and other benefits to its members, combined with a charitable, social or religious mission carried out through local chapters or lodges. To buy coverage you become a member, often simply by purchasing a policy. Fraternals are exempt from federal income tax under Internal Revenue Code Section 501(c)(8) and are regulated by state insurance departments under separate fraternal laws.

Well-known U.S. examples include Thrivent, Knights of Columbus, Modern Woodmen of America and WoodmenLife. They sell the same core products as commercial insurers: term, whole life, universal life and annuities. Hypothetical example: a member buys a participating whole life policy from a fraternal, receives dividends much as a policyholder of a mutual company would, and can join volunteer projects or apply for scholarships the society funds from its surplus.

Membership rules vary. Some fraternals are open to almost anyone, while others are tied to a religion or heritage. Guaranty association coverage for fraternal members also varies by state, so check your state's rules. Compare a fraternal's ratings, prices and policy terms the same way you would any insurer's; see mutual vs stock life insurance companies for how ownership structures differ.

Last reviewed October 4, 2026

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Related terms

Mutual insurance company An insurer owned by its policyholders rather than shareholders, which may return surplus earnings to them as dividends on participating policies. Stock insurance company An insurer owned by shareholders, who receive its profits, rather than by its policyholders as in a mutual company. Guaranty association A state safety net, funded by assessments on insurers, that continues coverage or pays claims up to set limits when a life or annuity insurer fails. Financial strength rating An independent agency's letter-grade opinion of an insurer's ability to pay claims and meet its policy obligations over time.

Related guides

The 100 largest life insurance companies in the U.S. The 100 largest U.S. life insurance groups by 2024 individual life premiums (NAIC): the top 25 in a table, the rest by type, and what size does not tell you. Mutual vs stock life insurance companies Mutual insurers are owned by policyholders and stock insurers by shareholders. What that changes about dividends, governance and safety, and what it doesn't.

Related insurers

Foresters Financial A Toronto-based fraternal benefit society founded in 1874 that sells term, whole and universal life through independent agents, with member benefits attached. Knights of Columbus A Catholic fraternal benefit society founded in 1882 that sells participating whole life, term, annuities and long-term care to members and their families. Modern Woodmen of America A fraternal benefit society founded in 1883 and based in Rock Island, Illinois, selling whole, universal and term life and annuities to nearly 700,000 members. Royal Neighbors of America Women-founded fraternal insurer in Rock Island, Illinois, selling final expense, whole life, term and annuities via independent agents in 43 states and D.C. Thrivent A member-owned Christian fraternal benefit society formed by the 2002 merger of two Lutheran fraternals, selling life insurance through its own advisors. WoodmenLife An Omaha fraternal benefit society founded in 1890, selling term, whole, universal and final expense life through its own representatives and local chapters.