A Helping Hand: The History and Protections of Fraternal Benefit Societies
Mutual Support in Ancient Times: Long before commercial insurance, fraternal societies offered a social safety net. Ancient guilds and religious groups provided financial aid during illness, death, or hardship. These early forms emphasized shared values and community, laying the groundwork for the fraternal societies we know today.
The Rise of Modern Fraternalism (18th & 19th Centuries): In the 18th and 19th centuries, with growing industrialization and a mobile workforce, formal fraternal societies emerged. Groups like the Freemasons and the Odd Fellows offered life insurance, disability benefits, and even orphan care. These societies were often founded by working-class men and immigrants seeking financial security and a sense of belonging.
Benefits and Bylaws: Fraternal societies functioned through member contributions (dues) which funded a common pool used to pay benefits. Unlike commercial insurance, membership often involved social activities and rituals, fostering a strong sense of community. Strict bylaws ensured financial stability and prevented abuse.
Creditor Exemptions: A Shield, Not a Sword: A key feature of fraternal benefits is their exemption from creditors. This stemmed from the societies’ mutual aid nature. Their funds were seen as a safety net for families, not personal wealth. Exempting benefits ensured they remained available for those in need, even if a member faced financial difficulties.
Fraternalism Today: While commercial insurance has become dominant, fraternal societies continue to exist. They offer competitive rates and a focus on member well-being. The sense of community remains a core value, attracting individuals seeking a more personal approach to financial security.
Protecting Assets, Not Loopholes: It’s important to note that creditor exemptions are not designed to shield personal assets. They aim to ensure that a member’s family or dependents have access to basic financial support even during financial hardship. These exemptions typically have limitations on amounts and may not apply to all types of fraternal benefits.
Most states offer exemptions for fraternal benefit society benefits.
- Alaska Stat. § 21.84.240 – Fraternal benefit society benefits
- Ala. Code § 6-10-8 – Fraternal benefit society benefits
- Ala. Code § 27-14-29 – Fraternal benefit society benefits
- Ala. Code § 27-34-1 – Fraternal benefit society benefits
- Ala. Code § 27-34-27 – Fraternal benefit society benefits
- Ark. Code Ann. � 23-74-403 – Fraternal benefit society benefits
- Ariz. Rev. Stat. § 20-877 – Fraternal benefit society benefits
- Cal. Civ. Proc. Code § 704.170 – Fraternal Benefit Society benefits
- Cal. Civ. Proc. Code § 704.120 – Fraternal unemployment benefits
- Conn. Gen. Stat. Ann. § 38a-637 – Fraternal benefit society benefits
- D.C. Code Ann. § 31-5315 – Fraternal benefit society benefits
- Del. Code Ann. tit. 18, § 6218 – Fraternal benefit society benefits
- Fla. Stat. Ann. § 632.619 – Fraternal benefit society benefits
- Ga. Code Ann. § 33-15-62 – Fraternal benefit society benefits
- Haw. Rev. Stat. § 432:2-403 – Fraternal benefit society benefits
- Iowa Code § 512B.18 – Fraternal benefit society benefits
- Idaho Code § 41-3218 – Fraternal benefit society benefits
- 215 Ill. Comp. Stat. 5/299.1a – Fraternal benefit society benefits
- Ind. Code Ann. § 27-11-6-3 – Fraternal benefit society benefits
- Kan. Stat. Ann. § 60-2313 (a)(8) – Fraternal life insurance benefits
- Kan. Stat. Ann. § 60-2313 (a)(7) – Cash value of life insurance; not exempt if obtained within 1 year prior to bankruptcy with fraudulent intent.
- Kan. Stat. Ann. § 40-414 (b) – Cash value of life insurance; not exempt if obtained within 1 year prior to bankruptcy with fraudulent intent.
- Ky. Rev. Stat. Ann. § 427.110 (2) – Fraternal benefit society benefits
- La. Rev. Stat. Ann. § 22:298 – Fraternal benefit society benefits
- Mass. Gen. Laws ch. 176, § 22 – Fraternal benefit society benefits
- Md. Code Ann., [Ins.] § 8-431 – Fraternal benefit society benefits
- Md. Code Ann., [Est. & Trusts] § 8-115 – Fraternal benefit society benefits
- Me. Rev. Stat. Ann. tit. 24-A, § 4118 – Fraternal benefit society benefits
- Mich. Comp. Laws § 500.8181 – Fraternal benefit society benefits
- Minn. Stat. Ann. § 64B.18 – Fraternal benefit society benefits
- Mo. Rev. Stat. § 513.430 1.(8) – Fraternal benefit society benefits to $5,000, bought over 6 months before filing
- Miss. Code Ann. § 83-29-39 – Fraternal benefit society benefits
- Mont. Code Ann. § 33-7-522 – Fraternal benefit society benefits
- N.C. Gen. Stat. § 58-24-85 – Fraternal benefit society benefits
- N.D. Cent. Code § 26.1-15.1-18 – Fraternal benefit society benefits
- N.D. Cent. Code § 26.1-33-40 – Fraternal benefit society benefits
- Neb. Rev. Stat. § 44-1089 – Fraternal benefit society benefits to $100,000 loan value from assets established more than three years prior to bankruptcy; no exemption if beneficiary convicted of a crime related to benefits
- N.H. Rev. Stat. Ann. § 418:17 – Fraternal benefit society benefits
- N.J. Stat. Ann. § 17:44B-1 – Fraternal benefit socieity benefits
- N.M. Stat. Ann. § 59A-44-18 – Fraternal benefit society benefits
- Nev. Rev. Stat. Ann. § 695A.220 – Fraternal benefit society benefits
- Ohio Rev. Code Ann. § 3921.18 – Fraternal benefit society benefits
- Ohio Rev. Code Ann. § 2329.66 (A)(6)(d) – Fraternal benefit society benefits
- 36 Okla. Stat. Ann. § 2718.1 – Fraternal benefit society benefits
- Or. Rev. Stat. § 748.207 – Fraternal benefit society benefits
- Or. Rev. Stat. § 18.348 – Fraternal benefit society benefits
- 42 Pa. Cons. Stat. Ann. § 8124 (c)(1),(8) – Fraternal benefit society benefits
- R.I. Gen. Laws § 27-25-18 – Fraternal benefit society benefits 27-25-18
- S.C. Code Ann. § 38-38-330 – Fraternal benefit society benefits
- S.D. Codified Laws Ann. § 58-37A-18 – Fraternal benefit society benefits
- Tenn. Code Ann. § 56-25-403 – Fraternal benefit society benefits
- Tex. Ins. Code Ann. § 885.316 – Fraternal benefit society benefits
- Utah Code Ann. § 31A-9-603 – Fraternal benefit society benefits
- Va. Code Ann. § 38.2-4118 – Fraternal benefit society benefits
- Vt. Stat. Ann. tit. 8, § 4478 – Fraternal benefit society benefits
- Wash. Rev. Code Ann. § 48.36A.180 – Fraternal Benefit Society Benefits
- Wis. Stat. Ann. § 614.96 – Fraternal benefit society benefits
- W. Va. Code § 33-23-21 – Fraternal benefit society benefits
- Wyo. Stat. § 26-29-218 – Fraternal benefit society benefits