One of the many branches of the secret society movement of the late nineteenth and early twentieth centuries, fraternal benefit societies took the benefits system of fraternal orders such as the Odd Fellows, but replaced traditional sick pay and funeral benefits with insurance policies. Joining a fraternal benefit society was equivalent to taking out an insurance policy with the society; the premiums took the form of monthly dues, and members also met regularly for business meetings, social functions, and the initiation of new candidates.
The era of fraternal benefit societies began in 1869, when an American fraternal order, the Ancient Order of United Workmen, changed its benefit plan to a system of insurance policies for members. The economic crises of the 1870s, when more than 60 major insurance firms went bankrupt, made many Americans deeply suspicious of commercial insurance companies and encouraged them to embrace a system that seemed less vulnerable to economic vagaries. Between 1870 and 1910, accordingly, some 3500 fraternal benefit societies sprang up across America and Canada. Similar factors in the 1880s and 1890s led to a similar expansion of friendly societies, the British equivalent of North American fraternal benefit societies, in Britain itself and many parts of the British Empire.
The fraternal insurance industry became a speculative favourite in the late nineteenth century and drew a great deal of investment capital. The demand for new rituals was so great that when Lew Wallace’s novel Ben-Hur (1880) became a nationwide bestseller in America, a group of promoters bought the fraternal-order rights from him for a substantial sum, and launched the Tribe of Ben-Hur, a fraternal benefit society with four degrees of initiation. The Tribe spread throughout the Midwest and remained in existence until 1978. Most American fraternal benefit societies, like nearly all American institutions, were segregated by race, but this simply drove the expansion of African-American fraternal benefit societies drawing on the rich heritage of secret societies in the African-American community.
Most of the fraternal benefit societies, however, fell victim to their own enthusiasm and a failure to grasp the fact that insurance risk increases with age. Societies usually started with a relatively young membership and few payouts, and their bank accounts grew steadily as membership expanded. When the market for fraternal insurance was saturated, however, new memberships slowed to a trickle, payouts increased as the membership aged, and the risk of bankruptcy increased. A survey of fraternal benefit societies (cited in Palmer 1944, p. 211) found that 85 percent of the benefit societies founded between 1870 and 1910 went bankrupt, after an average lifespan of 15 years.
While most fraternal benefit societies went bankrupt, merged with others, or turned themselves into ordinary insurance firms during the twentieth century, some managed to survive and remain active today. More than a hundred fraternal benefit societies still exist today in Britain, America, Canada, and a variety of Commonwealth nations, offering insurance policies and annuities to members.
- fraternal orders
- Odd Fellowship
- Ancient Order of United Workmen
- African-American secret societies
The Element Encyclopedia of Secret Societies : the ultimate a-z of ancient mysteries, lost civilizations and forgotten wisdom written by John Michael Greer – © John Michael Greer 2006