Not-for-profit life insurance is also call Fraternal life insurance. It is life insurance coverage that a fraternal group, which is a non-profit organization created through a membership system, offers to its members, and often non-members as well. These companies are run by policyholders for the benefit of policyholders. They focus is on keeping the premiums low and the services and features of the policy at the highest levels. Because these companies don’t have shareholders or high paid executives, the premiums are often substantially lower than for profit companies. Well known not for profit insurance companies include the Knights of Columbus, Foresters, Oxford and GCU.
Their life insurance policies operate just like for profit policies but often have much better features beyond a lower price. For example, you will see very fast accumulation of cash value in many of their permanent life policies as well as generous dividends paid on an annual basis (dividends are cash payments made to policyholders). These companies are regulated and licensed by the State Insurance Commissioner just like their for-profit peers. And they are backed, like for-profit plans, by the State of Connecticut Guarantee Fund. This fund pays the claims of policyholders if a licensed insurer is unable to- for whatever reason.