A more thorough explanation:

Fraternal benefit society benefits are benefits given to members of fraternal societies, also known as mutual aid societies, that provide mutual financial assistance. These benefits vary depending on the organization, but almost all fraternal benefit societies offer some form of life or health insurance.

Fraternal benefit societies have been instrumental in providing social welfare protections before government welfare programs existed and were foundational to modern insurance. Some organizations even provide benefits and other aid to local communities.

Fraternal benefit societies are usually organized around common values and interests, such as religion or trade. Sometimes, participation in these commonalities is required to receive benefits.

For example, the Knights of Columbus is a fraternal benefit society that provides life insurance, disability insurance, and long-term care insurance to its members. The organization is based on Catholic values and requires members to be practicing Catholics.

Another example is the Modern Woodmen of America, which offers life insurance, annuities, and other financial products to its members. The organization is based on the values of family, community, and country.

Fraternal benefits from registered non-profit organizations remain tax-free under 501(c)8 and are usually not considered in bankruptcy proceedings.